The second quarter of 2025 demonstrated the market’s resilience in absorbing sharp, politically driven shocks. The period was defined by the U.S. administration's sweeping tariff announcements in April, which sent global equities into a tailspin. For those prepared, the volatility created opportunities amid the noise. 

The quarter began with a shock as sweeping tariff announcements rattled global markets, briefly driving the S&P 500 Index into correction territory. By mid-April, the outlook shifted dramatically. President Trump reversed many of the proposed trade policies, calming investor nerves and fuelling a V-shaped recovery. By the end of the quarter, major indices like the S&P 500 and the S&P/TSX Composite had not only rebounded but also registered impressive gains, driven by renewed optimism in sectors such as technology and materials.

International markets followed a similar pattern of disruption and recovery. Emerging markets outperformed, buoyed by strong demand for commodities and easing trade pressures. Developed markets also delivered solid returns, though European equities lagged.

While equity markets stole the spotlight, fixed income investors navigated their own share of volatility. Early in the quarter, bond yields dipped as investors sought safety amid tariff-induced uncertainties. By quarter-end, yields stabilized as central banks held firm on their policy rates. The U.S. Federal Reserve maintained rates at 4.5%, while the Bank of Canada kept its rate at 2.75%.

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