📰 The Post-Covid Era of Ultra-Calm Markets Is Over
April 17, 2025 | WSJ Summary by Krystal Hur
Volatility surges amid Trump’s trade policies and investor uncertainty
🔹 Summary:
The two-year stretch of calm, record-breaking gains in U.S. markets has ended. President Trump’s aggressive trade policies and tariffs have sparked a sharp rise in market volatility, pushing all three major U.S. indexes down by more than 8% year-to-date. The Nasdaq is officially in a bear market, having dropped over 20% from its recent peak.
📉 Market Reaction:
Nvidia, AMD, and Tech stocks led the decline, with daily selloffs now capable of erasing trillions in value within hours.
The Cboe Volatility Index (VIX)—Wall Street’s fear gauge—spiked to pandemic-era highs and then dropped at record pace the next day.
Over 98 billion shares traded last week across NYSE and Nasdaq, marking the highest weekly volume ever recorded.
⚠️ Investor Behavior:
Traditional strategies like “buy the dip” are falling out of favor amid economic uncertainty.
Investors are increasingly using VIX call options and S&P 500 puts to hedge against further volatility.
The options skew has reached its highest level since 2020, signaling a sharp rise in bearish sentiment.
🗣️ Key Commentary:
“There’s going to be punches, and you don’t know where they’re going to come next.”
— Amy Wu Silverman, RBC Capital Markets“We didn’t include an S&P chart because it could be off by 5% before publication.”
— LPL Financial Strategists
🏛️ Policy Signals:
Trump has acknowledged the market turmoil, stating he paused many tariffs due to “yippy” investor reactions.
Treasury Secretary Scott Bessent said the market may stabilize and hinted the VIX might have peaked.
📈 Outlook:
Despite fears, analysts are still forecasting strong corporate earnings, though Trump’s tariff unpredictability looms as a key risk. The post-Covid tranquility in financial markets is over, and both investors and policymakers are bracing for more turbulence.
