Weekly Stock Market Analysis, Commentary and Picks for the week ending April 25, 2025

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Markets Rally Strongly, But Risks Still Linger Beneath the Surface

Markets delivered a powerful rebound last week, with the S&P 500, Nasdaq, Dow, and Russell 2000 all posting strong gains, supported by easing tariff headlines, standout tech earnings, and renewed appetite for risk. Positive technical signals, including the rare Zweig Breadth Thrust and a lower VIX, confirmed improving breadth and sentiment, though rising tariff tensions between the U.S. and China remain a key risk factor moving forward. Discretionary sectors outperforming staples and exceptional earnings results from leaders like Alphabet and ServiceNow added depth to the rally. However, economic fundamentals still warrant caution, as GDP forecasts are being revised downward and consumer sentiment remains fragile. In this environment, selective risk-taking is warranted — investors should consider moderately increasing exposure while remaining disciplined, protecting capital, and staying nimble for potential reversals. Leadership last week concentrated in Technology, Discretionary, and Communications sectors, while defensive areas and gold softened as capital rotated into growth themes. Overall, while the rally is showing encouraging momentum, the path ahead remains dependent on progress in trade talks, corporate earnings, and stabilization in macro indicators.