Q1 2025 Market Recap: Bumpy ride for U.S. investors

A shaky start amid tariffs and global uncertainty 

After two strong years for U.S. markets, 2025 kicked off with turbulence. What began as a promising first quarter ended in market correction territory, driven by rising tariff tensions, softening earnings projections and uncertainty surrounding Federal Reserve policy.  

Download our Q1 2025 Market Recap to get the complete overview, including data, charts and more. 

Key market highlights from Q1 2025 

1. Equities 

Investor sentiment waned throughout the quarter, especially regarding U.S. large-cap stocks. Concerns over new tariffs and earnings downgrades weighed on performance, while non-U.S. markets outperformed their American counterparts. 

2. Fixed income 

Bond markets recovered some ground in Q1, offering investors a rare bright spot amid equity market weakness. Traditional safe havens like gold also gained attention during the quarter. 

3. Global markets 

International equities — particularly in Europe — delivered stronger results, surprising many analysts, given recent pessimism around European growth. Stimulus expectations and more attractive valuations contributed to this rebound. 

4. Geopolitical dynamics 

Geopolitical uncertainty, shifting trade policies and signs of slowing economic momentum are shaping the outlook for 2025. While inflation continues to cool, recession risks are on the rise. 

What to expect this year 

Though the U.S. economy remains resilient, investors face a complex environment. Political change, global unrest and mixed economic signals suggest a cautious outlook for the months ahead. 

Contact us with any questions about this Market Recap or how TruePlan can help enhance your organization's retirement offerings.  

To learn more about what happened in the fourth quarter, read our Q4 2024 Retirement Market Recap. It leads to our current historically high valuations and rising geopolitical risks.