Trump's tariff pause leads to intense market volatility, with mixed reactions from investors

From Yahoo Finance: 2025-04-10 09:47:00

U.S. President Trump’s reversal on tariffs causes market volatility, with investors shifting between stocks and safe-havens. Moves since the tariff announcement on April 2 have been intense, similar to crises like the 2008 financial crisis and 2020 COVID crisis, but much faster this time.

Global equity markets surged after Trump’s tariff pause, but remain below pre-announcement levels. Hong Kong shares fell 13%, Europe’s STOXX 600 and S&P 500 had their steepest drops since COVID. Economist warns of high volatility levels impacting financial markets.

U.S. bond market at the center of market swings as investors dump Treasuries due to tariff fears. Ten-year Treasury yields fell 30 bps following April 2, rose 25 bps on Wednesday, then dropped after tariff pause news. Dollar weakens against major currencies, traders protect against volatility.

Global banks face growth shock and rate cut expectations post-tariff plan, with shares plunging then rebounding. KBW Bank Index slumped 16% in two days, European lenders fell most since 2020. Banking shares rebound post-pause, KBW Bank Index surges 9% on Wednesday, European bank stocks rally 7%.

Markets experience rapid and intense volatility post-tariff announcement, with VIX index hitting crisis levels. VIX at 60, similar to 2008 and 2020 market sell-offs, drops to 35. Fastest rise and fall in index recorded in the past three days. Investors seek protection against volatility.



Read more at Yahoo Finance: Markets boomerang as ‘Trump Blink’ redefines volatility