Valuation guru Aswath Damodaran shared his take on the April rollercoaster for global asset classes, and said that the month saw tech and momentum plays return, with equities remaining resilient despite tariffs and threats to the US Federal Reserve.
In a blog post titled 'The Greed & Fear Tango: The Markets in April 2025,' Damodaran, the Professor of Finance at the Stern School of Business at New York University recalled a month marked by fear, hope, and surprising resilience in global equities.
Early in April, Trump-triggered tariffs rippled worldwide, erasing over $9 trillion from global stock market value in just two days. Chinese stocks took the hardest hit, down 3.69% in April, while India and Latin America managed to shine, rising close to 3.5%. Tech stocks - nearly a third of the US market value - were in the spotlight after a rough first quarter, bleeding $1.78 trillion early in April, but later clawed back to a 1.67% gain by month’s end.
Global markets plummeted in early April, as fears of a trade war and talk of Federal Reserve Chair Jerome Powell’s ouster fuelled wild swings. Yet, by the end of April, the S&P 500, Nasdaq, and MSCI World Index stood roughly where they started, defying the gloom.
The ‘Magnificent Seven’ tech titans, after eroding $2.6 trillion of wealth this year staged a comeback in April, recovering nearly all of the $1.55 trillion losses seen in early April.
In this revival, Damodaran noted a major shift. After the first quarter of 2025 that saw value stocks return and caution seemed to rule, April saw a return to the bold drivers of 2024 - tech, growth, and momentum. High Price-to-Earnings stocks, battered early in 2025, rose 1.74% for the year, while low P/E stocks slipped 2.22%. high dividend yielding stocks and buyback plays lagged, signalling that investors were not hiding in ‘safe’ corners.
Beyond stocks, the picture was mixed, as US treasury rates barely budged, but a 38% spike in the US sovereign Credit Default Swap (CDS) spread hinted at growing distrust, sparked by threats to the Fed’s independence. “Trust, once lost, is hard to regain,” Damodaran said in his blog, noting this could challenge the US treasury’s safe-haven status. The dollar slid 3% against other currencies and 5% against the Euro during April, while commodities like oil cooled off, hinting at a global slowdown. Prices of gold, on the other hand, climbed 5.3% and Bitcoin soared over 14% in April as investors sought shelter amid uncertainty.
What stood out for Damodaran was the market’s grit, as despite the chaos, equities didn’t collapse. The NYU Professor credited this trend to a new era where social media and diverse traders dilute the sway of big fund managers. Damodaran noted that the market flexed to push the administration to pause tariffs and Fed threats, after sharp sell-offs. However, Aswath Damodaran has warned against chasing the noise.
Damodaran’s world view in April was guided by risk, as he tracked the equity risk premium which spiked above 5% early in April, but settled at 4.58%, near its starting point. The VIX, a fear gauge, hit 52.33 mid-month but eased to 24.70 by the end of April. High-yield bond spreads rose in a sign of economic worries, and across assets, stocks and treasuries moved in sync, unusual for a crisis. In all this, gold tracked stocks more closely than Bitcoin, noted Damodaran.
The ‘Dean of Valuation’ captured three big lesson for investors. First, markets are tougher than they seem, thanks to diverse voices on social media and fragmented trading, unlike the herd-driven panic of an earlier era. Second, markets wield power: the US administration dialled back tariffs and Fed threats after sell-offs, bending to Wall Street’s pressure. Third, unpredictability reigns - active traders chasing ‘expert’ advice likely fared worse than those who stayed steady. “April’s damage was worse for those glued to market chatter,” noted Aswath Damodaran.
During April, Damodaran stuck to his contrarian playbook, buying BYD shares when prices dipped, but avoiding timing the market. With papers to grade and his daughter expecting a child, he said his priorities are clear, “The market pales next to meeting my granddaughter.” He plans to revisit his ‘Magnificent Seven’ holdings as earnings roll in, promising to share his assessment of the valuations.
April 2025, Damodaran argued in his blogpost, was less a meltdown and more a recalibration in a world of tariffs and political tremors. India’s strength, tech’s comeback, and rising distrust in US institutions are threads to watch, he said.
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