Markets boomerang as 'Trump Blink' redefines volatility

Amanda Cooper and Samuel Indyk

Thu, Apr 10, 2025, 6:47 AM 4 min read

By Amanda Cooper and Samuel Indyk

LONDON (Reuters) - U.S. President Donald Trump's U-turn connected tariffs has rained yet much volatility connected markets, leaving investors skidding from stocks to safe-havens and back, and portion erstwhile crises person seen bigger moves, fewer person been this fast.

Trump said connected Wednesday helium would temporarily little the hefty duties imposed connected dozens of countries portion ramping up unit connected China, igniting 1 of the astir aggravated turnarounds for markets since the 2020 COVID crisis.

With volatility, it's the velocity of a determination that tin acceptable alarm bells off. And April's marketplace swings person played retired with astir the aforesaid strength arsenic they did successful 2020 and adjacent that of the 2008 fiscal crisis, but successful a fraction of the time.

Here's however the moves person unfolded since Trump's reciprocal tariff announcement connected April 2:

1/ TO THE MOON?

Equity markets crossed the globe rebounded connected Wednesday and Thursday aft Trump's pause. The S&P 500 soared 9.5% connected Wednesday, its biggest regular summation since 2008, portion Europe staged its biggest leap since March 2020 connected Thursday.

But astir large indexes stay beneath Trump's "Liberation Day" announcement, and each person suffered immoderate of their steepest falls successful years.

Hong Kong shares slumped 13% connected Monday, their biggest autumn since 1997, portion Europe's STOXX 600 scale and S&P 500 had their steepest three-day falls since the COVID-19 pandemic.

"We are seeing levels of uncertainty and levels of volatility that we haven't seen since the planetary fiscal crisis," said George Lagarias, main economist astatine Forvis Mazars.

"These levels of volatility are not bully for fiscal markets. It risks dislocations," helium added.

2/ BOND VORTEX

The U.S. enslaved marketplace has recovered itself astatine the epicentre of the gyrations arsenic investors, rattled astir the interaction of tariffs connected the U.S. system and the ensuing harm to the stableness of U.S. assets, dumped Treasuries. Ten-year Treasury yields, which fell 30 ground points implicit the days pursuing April 2, roseate by arsenic overmuch arsenic 25 bps astatine 1 constituent connected Wednesday, earlier dropping astir arsenic rapidly erstwhile quality of the intermission hit. Yields soared by arsenic overmuch arsenic 36 bps betwixt April 2 and the precocious connected April 9 and are present 14 bps higher. During the COVID situation successful aboriginal 2020, they fell arsenic overmuch arsenic 120 bps earlier snapping backmost to commercialized immoderate 100 bps higher erstwhile the worst of the situation had passed.

3/ BUDDY, CAN YOU SPARE THE DOLLAR?

The dollar has not acted arsenic the FX market's safe-haven anchor and has fallen against a fig of large currencies since April 1. It has mislaid astir 5% against the Swiss franc and astir 3% against the Japanese yen and the euro. As acold arsenic volatility is concerned, traders person rushed to fastener successful extortion against large terms swings, not slightest due to the fact that the winners and losers of the adjacent acceptable of tariff headlines whitethorn not beryllium obvious. Against a handbasket of currencies, the dollar has had the benignant of circular travel since April 2 that it did during COVID, but again, successful a fraction of the time.