IPO prospects are now clearly weakening, and this began before the historic tariffs announced on April 2. The deepening sell-off in April has added to significant slowdowns in the U.S. and Stockholm IPO Pulses. In fact, we’ve already seen multiple companies postpone IPOs in recent days.
Nasdaq IPO Pulse signals softer U.S. IPO activity likely ahead
Consistent with our analysis back in January, IPO activity continued its uptrend in Q1 2025, seeing 58 non-SPAC IPOs (chart below, green bars) – the most in over three years.
But a slowdown may be taking shape.
After hovering around a 3¼-year high in December, the Nasdaq IPO Pulse has faded this year, falling to a 16-month low in March (blue line).
To determine whether this recent weakness signals a downturn in IPO activity ahead, we compared it against past downturns in the IPO Pulse that signaled genuine downturns in IPO activity and those that were false alarms. This comparison mirrors the method that the National Bureau of Economic Research uses to date U.S. recessions, considering the depth, diffusion and duration of the downturn across the components.
Unfortunately, for the first few months of a downturn, genuine downturns and false alarms are essentially indistinguishable. So, through March, it’s not possible to definitively say a downturn is assured, but the deepening market sell-off in April makes it quite likely a genuine downturn will take hold as soon as Q2.
Stockholm IPO Pulse indicates cooling IPO activity likely ahead
In Stockholm, the situation is similar. Q1 IPO activity stayed in an uptrend in Stockholm, with eight IPOs (chart below, green bars) – the second-most in a quarter in nearly three years, only trailing Q4 2024’s 10 IPOs.
But, here too, the IPO Pulse is indicating that this upturn is unlikely to last.
In comparing this downturn to past downturns that anticipated genuine downturns in Stockholm IPO activity and false alarms, this downturn was already moving closer to a genuine downturn in March based on its depth and diffusion across components. However, it’s tracking false alarms in terms of duration, and all three elements – depth, diffusion, and duration – need to be in place for a genuine downturn to develop.
Like in the U.S., it would have been premature to declare a downturn in Stockholm IPO activity lies ahead through March, but the global sell-off in April makes a downturn highly likely.
Increased uncertainty and reciprocal tariffs weighing on equities
Through March, a key reason for the dimming outlooks in the IPO Pulses was increased uncertainty – a risk we highlighted in our 2025 outlook back in December.
That increased uncertainty was driven by rapidly changing U.S. trade policy, pushing U.S. uncertainty to a record high in March. Even though Sweden’s uncertainty remained around its historic average, the uncertainty in the U.S. spilled over into international markets.
As a component in both IPO Pulses, market returns matter since it can filter into other components, like valuations, volatility, and sentiment, which is exactly what we’ve seen in the U.S. and Stockholm. This step down in market returns in April will likely push the IPO Pulses into deeper downturns.
Downturns in IPO activity in the U.S. and Stockholm likely lie ahead
In the coming months, IPO activity is likely to slow in the U.S. and Stockholm, possibly significantly, as historic changes in trade policy add to headwinds.
The severity of these downturns will become clearer in our next update in July.
Read the full article by Phil Mackintosh and Michael Normyle / Nasdaq
