Monthly Market Summary

• The S&P 500 Index returned +6.3%, its strongest 1-month return since November 2023. Large Cap Growth stocks led the rally, with the Nasdaq 100 and Russell 1000 Growth gaining +9.2% and +8.9%, respectively.
• Technology was the top-performing S&P 500 sector for a second consecutive month, with the Industrials and Consumer Discretionary sectors also gaining over +8%. Health Care was the only sector to trade lower, and defensive sectors were relative underperformers as the market traded higher.
• Bonds ended the month with a slight loss, with the U.S. Bond Aggregate posting a -0.6% total return. Corporate bonds outperformed as credit spreads tightened, with investment-grade posting a +0.2% total return and high-yield returning +1.7%.
• International stocks traded higher but underperformed the S&P 500. Developed Markets gained +4.8%, while Emerging Markets returned +4.0%.

Markets Back Near All-Time Highs, But Forward Visibility Remains Low

The defining story of 2025 has been changing trade policy. Markets have weathered two months of policy-driven volatility, only to end up roughly where they started. After a nearly 20% decline from late February to early April, the S&P 500 has rebounded and is within 4% of its all-time high. What remains is weakened business and consumer confidence, rising inflation expectations, and a Federal Reserve that has paused interest rate cuts. The threat of a full-scale trade war and global supply chain disruption has diminished, but the full impact of recent events may take months to become known. Early economic data suggests the tariffs have had a limited impact, but we will continue monitoring what happens to economic and earnings growth in the coming quarters.

To date, the administration has introduced multiple 90-day tariff pauses. The pauses are temporary and staggered: the pause for most countries runs through early July, while the agreement with China extends through mid-August. A recent court ruling adds a layer of uncertainty by challenging the administration’s authority to impose tariffs, although the decision is under appeal. The U.S. economy entered the year with solid momentum, and current market conditions suggest investors are pricing in only a modest impact from tariffs. With policy details still emerging, markets are likely to remain sensitive to new developments, which could mean continued volatility over the coming months.

Looking Ahead: Navigating Uncertainty with a Steady Plan

What is most notable about this period is how quickly sentiment can change. Markets are forward-looking, which means they price in not only current conditions but also future expectations. This helps explain why the market can rally when data is weak and selloff despite strong earnings and economic growth. The stock market’s sharp decline and quick rebound is a reminder of the importance of maintaining a long-term perspective. Periods like this reinforce several important investment principles. Staying invested can help avoid the costly mistakes of poorly timed exits and re-entries. Emotional discipline and a well-diversified portfolio are your best defenses against making reactive decisions during market volatility. With the potential for more volatility, it’s important to focus on what you can control—diversification, discipline, and sticking to your long-term plan.

Important Notices & Disclaimer

The information and opinions expressed herein are solely those of PFG Private Wealth Management, LLC (PFG), are provided for informational purposes only and are not intended as recommendations to buy or sell a security, nor as an offer to buy or sell a security. Recipients of the information provided herein should consult with their financial advisor before purchasing or selling a security.

The information and opinions provided herein are provided as general market commentary only, and do not consider the specific investment objectives, financial situation or particular needs of any one client. The information in this report is not intended to be used as the primary basis of investment decisions, and because of individual client objectives, should not be construed as advice designed to meet the particular investment needs of any investor.

The comments may not be relied upon as recommendations, investment advice or an indication of trading intent. PFG is not soliciting any action based on this document. Investors should consult with their financial adviser before making any investment decisions. There is no guarantee that any future event discussed herein will come to pass. The data used in this publication may have been obtained from a variety of sources including U.S. Federal Reserve, FactSet, Bloomberg, Bank of America Merrill Lynch, iShares, Vanguard and State Street, which we believe to be reliable, but PFG cannot be held responsible for the accuracy of data used herein. Any use of graphs, text or other material from this report by the recipient must acknowledge MarketDesk Research as the source. Past performance does not guarantee or indicate future results.   Investing   involves   risk,   including   the possible loss of principal and fluctuation of value. PFG disclaims responsibility for updating information. In addition, PFG disclaims responsibility for third-party content, including information accessed through hyperlinks.

No mention of a particular security, index, derivative or other instrument in the report constitutes a recommendation to buy, sell, or hold that or any other security, nor does it constitute an opinion on the suitability of any security, index, or derivative. The report is strictly an information publication and has been prepared without regard to the particular investments and circumstances of the recipient.

READERS   SHOULD   VERIFY   ALL   CLAIMS   AND   COMPLETE    THEIR    OWN RESEARCH AND CONSULT A REGISTERED FINANCIAL PROFESSIONAL BEFORE INVESTING IN ANY INVESTMENTS MENTIONED IN THE PUBLICATION. INVESTING IN SECURITIES AND DERIVATIVES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK, AND READERS MAY LOSE MONEY TRADING AND INVESTING IN SUCH INVESTMENTS.

PFG Private Wealth Management, LLC is a registered investment advisor.

Recap of Year-to-Date Market Performance

Stocks started 2025 trading higher but have since pulled back. The S&P 500 has declined more than -8% from its all-time high on February 19th, lowering its year-to-date return to -5% (Figure 1). The Nasdaq 100, an index of technology and growth stocks, is down -7% year-to-date, while the small-cap-focused Russell 2000 has fallen -9%. The Magnificent 7, a group that includes Microsoft, Apple, Meta, Alphabet, Amazon, Nvidia, and Tesla, has declined nearly -15%. Given the recent volatility, our team wanted to discuss the current environment and provide a market update.

What’s Behind the Market Selloff?

Several factors are contributing to the current market selloff. First, momentum stocks that led the 2024 rally are now experiencing a sharp reversal. Figure 2 shows 2024’s top performers have become 2025’s underperformers. Technology stocks, the Magnificent 7, and Large Cap Growth powered last year’s gains, fueled by enthusiasm for the artificial intelligence industry. However, the concentrated rally led to stretched valuations and crowded positioning, particularly among the biggest companies. As those stocks lose momentum, it’s triggering a rapid unwind, with a large amount of capital rotating at once. Second, investor exposure to the stock market was high entering 2025. Households’ allocation to stocks reached a record high, and institutional investors, such as pension funds, endowments, and insurance companies, increased their leverage and equity exposure last year as stocks traded higher. Now, institutional investors and hedge funds are deleveraging, adding to the selling pressure. Third, optimism around the Trump administration’s pro-growth policies has given way to concern, with worries that spending cuts and the uncertainty created by tariffs will slow economic growth.

Market Volatility vs. Economic Reality

It’s important to remember that the stock market isn’t the economy, with some data points signaling a different economic reality. The Federal Reserve’s Weekly Economic Index (WEI), which tracks real-time activity using data such as unemployment claims, rail traffic, steel production, and tax withholdings, remains positive (Figure 3). Despite recent stock market volatility, the WEI suggests the broader economy hasn’t felt a significant impact. In the bond market, high-yield credit spreads, which measure the difference in yield between riskier corporate bonds and U.S. Treasuries, remain near all-time lows (Figure 4). The stability of credit spreads indicates that, so far, the selloff has been largely confined to the stock market. Together, these two data points suggest the recent volatility may be a market-specific adjustment rather than a systemic issue or sign of broader financial strain.

Is This Normal and Can the Market Selloff Continue?

Market volatility can be unsettling, but it’s a normal part of investing. Periods of enthusiasm often lead to recalibration. It’s natural to feel uncertain, but history shows that staying invested through volatility and maintaining a longer-term view is a prudent approach. Since 1928, the S&P 500 has experienced a decline of -5% or more in 91 of the past 98 years. Yet, markets have demonstrated an ability to recover and rewarded patience. By maintaining a diversified portfolio aligned with your long-term goals, we’re positioned to weather the market’s swings.

Important Notices & Disclaimer

The information and opinions expressed herein are solely those of PFG Private Wealth Management, LLC (PFG), are provided for informational purposes only and are not intended as recommendations to buy or sell a security, nor as an offer to buy or sell a security. Recipients of the information provided herein should consult with their financial advisor before purchasing or selling a security.

The information and opinions provided herein are provided as general market commentary only, and do not consider the specific investment objectives, financial situation or particular needs of any one client. The information in this report is not intended to be used as the primary basis of investment decisions, and because of individual client objectives, should not be construed as advice designed to meet the particular investment needs of any investor.

The comments may not be relied upon as recommendations, investment advice or an indication of trading intent. PFG is not soliciting any action based on this document. Investors should consult with their financial adviser before making any investment decisions. There is no guarantee that any future event discussed herein will come to pass. The data used in this publication may have been obtained from a variety of sources including U.S. Federal Reserve, FactSet, Bloomberg, Bank of America Merrill Lynch, iShares, Vanguard and State Street, which we believe to be reliable, but PFG cannot be held responsible for the accuracy of data used herein. Any use of graphs, text or other material from this report by the recipient must acknowledge MarketDesk Research as the source. Past performance does not guarantee or indicate future results.   Investing   involves   risk,   including   the possible loss of principal and fluctuation of value. PFG disclaims responsibility for updating information. In addition, PFG disclaims responsibility for third-party content, including information accessed through hyperlinks.

No mention of a particular security, index, derivative or other instrument in the report constitutes a recommendation to buy, sell, or hold that or any other security, nor does it constitute an opinion on the suitability of any security, index, or derivative. The report is strictly an information publication and has been prepared without regard to the particular investments and circumstances of the recipient.

READERS   SHOULD   VERIFY   ALL   CLAIMS   AND   COMPLETE    THEIR    OWN RESEARCH AND CONSULT A REGISTERED FINANCIAL PROFESSIONAL BEFORE INVESTING IN ANY INVESTMENTS MENTIONED IN THE PUBLICATION. INVESTING IN SECURITIES AND DERIVATIVES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK, AND READERS MAY LOSE MONEY TRADING AND INVESTING IN SUCH INVESTMENTS.

PFG Private Wealth Management, LLC is a registered investment advisor.

This week’s inauguration activities in Washington mark Donald Trump’s return to the White House. As the second Trump administration starts, the market is looking ahead to what changes may take place in the coming years. In this one-pager, we briefly examine five key themes investors are monitoring as the political backdrop shifts in Washington. Before we dive in, it’s important to emphasize that policy changes often take time to materialize. Politicians make many promises during election years, and the government’s system of checks and balances can delay their implementation or cause them to remain unfulfilled. It’s important to recognize that the market could remain volatile as we await details about the administration’s policy agenda, with a steady stream of news headlines shaping sentiment.

1. Optimism Over Deregulation and Tax Cuts: There’s a sense of optimism among investors, with the administration expected to focus on deregulation and extending the tax cuts from the first Trump administration. These changes are seen as creating a more business-friendly environment, which could boost U.S. corporate profits and extend the stock market’s recent gains. Sectors such as finance, energy, and manufacturing are viewed as the most likely beneficiaries of these potential policy shifts.

2. Concerns About Global Tariffs and Trade Wars: Investors are concerned about the reintroduction or escalation of tariffs. Given Donald Trump’s history with trade policies, there is concern that trade disputes could resurface. This could negatively impact stocks and lead to slower economic growth by disrupting global trade, increasing costs for businesses, and contributing to inflation. However, if negotiations take place and agreements are reached quickly, investors’ worst fears may be overblown, an outcome that would be a positive development for the market.

3. Market Volatility and Policy Uncertainty: As with all new administrations, Donald Trump’s return to office has brought about renewed policy uncertainty and the potential for heightened market volatility in the near term. Markets are monitoring his early actions and executive orders to understand the ultimate direction of his administration’s policies. Given the headline-driven volatility in the first Trump administration, there is an expectation for increased volatility early in his second term, with a continual flow of news headlines driving sentiment until actual details emerge.

4. Bitcoin and Crypto Markets: Donald Trump’s evolving views and campaign comments on cryptocurrencies led to a post-election rally in Bitcoin and other crypto assets. Some investors interpret his comments and policy proposals as favorable for digital currencies, particularly his embrace of cryptocurrency during the campaign. In addition, the SEC recently established a “crypto task force” aimed at developing a regulatory framework for crypto assets. There is optimism about the potential for technological innovation with cryptocurrencies; however, speculation and sentiment shifts continue to largely dominate crypto markets, a trend that could continue in 2025.

5. Market Sentiment: The overall sentiment is characterized by cautious optimism. Investors are weighing potential benefits like tax reform and deregulation against risks such as inflation, trade tensions, and policy uncertainty. Markets are largely adopting a “wait and see” approach, holding off on making significant moves until more details emerge. The mixed early reaction highlights the complex and wide-ranging impact of Trump’s policies on the stock market, with investors preparing for both opportunities and challenges ahead. As always, maintaining a diversified portfolio and a long-term perspective can help navigate the uncertainties of shifting policy landscapes.

Please feel free to reach out to your advisor with any questions or to schedule a review.

PFG Private Wealth Management
(813) 286-7776

Important Notices & Disclaimer

The information and opinions expressed herein are solely those of PFG Private Wealth Management, LLC (PFG), are provided for informational purposes only and are not intended as recommendations to buy or sell a security, nor as an offer to buy or sell a security. Recipients of the information provided herein should consult with their financial advisor before purchasing or selling a security.

The information and opinions provided herein are provided as general market commentary only, and do not consider the specific investment objectives, financial situation or particular needs of any one client. The information in this report is not intended to be used as the primary basis of investment decisions, and because of individual client objectives, should not be construed as advice designed to meet the particular investment needs of any investor.

The comments may not be relied upon as recommendations, investment advice or an indication of trading intent. PFG is not soliciting any action based on this document. Investors should consult with their financial adviser before making any investment decisions. There is no guarantee that any future event discussed herein will come to pass. The data used in this publication may have been obtained from a variety of sources including U.S. Federal Reserve, FactSet, Bloomberg, Bank of America Merrill Lynch, iShares, Vanguard and State Street, which we believe to be reliable, but PFG cannot be held responsible for the accuracy of data used herein. Any use of graphs, text or other material from this report by the recipient must acknowledge MarketDesk Research as the source. Past performance does not guarantee or indicate future results.   Investing   involves   risk,   including   the possible loss of principal and fluctuation of value. PFG disclaims responsibility for updating information. In addition, PFG disclaims responsibility for third-party content, including information accessed through hyperlinks.

No mention of a particular security, index, derivative or other instrument in the report constitutes a recommendation to buy, sell, or hold that or any other security, nor does it constitute an opinion on the suitability of any security, index, or derivative. The report is strictly an information publication and has been prepared without regard to the particular investments and circumstances of the recipient.

READERS   SHOULD   VERIFY   ALL   CLAIMS   AND   COMPLETE    THEIR    OWN RESEARCH AND CONSULT A REGISTERED FINANCIAL PROFESSIONAL BEFORE INVESTING IN ANY INVESTMENTS MENTIONED IN THE PUBLICATION. INVESTING IN SECURITIES AND DERIVATIVES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK, AND READERS MAY LOSE MONEY TRADING AND INVESTING IN SUCH INVESTMENTS.

PFG Private Wealth Management, LLC is a registered investment advisor.