5 Charts from a Volatile 2 Weeks

The past two weeks have been busy for markets. Volatility spiked and a number of new trading records were hit. Today, we summarize what went on and how the recent activity and market moves compare to normal. 

Stocks and bonds both affected by tariff news

Before Q1 ended, the U.S. market had already started to fall. Fears about new tariffs impacting the cost of U.S. imports, U.S. production and the overall economy were starting to weigh on stocks.

Then, after the markets closed on Wednesday, April 2, President Trump announced the long-awaited “reciprocal tariffs.” These were much higher than expected and affected almost every country the U.S. trades with – shocking the market.

One week later, stocks soared after the reciprocal tariffs were delayed 90 days. The Nasdaq Composite index gained more than 12%, its second-best day ever.

Stocks weren’t the only thing seeing outsized returns. U.S. 10-year Treasuries also sold off, pushing yields up from below 3.9% to almost 4.6%, an increase of around 66 basis-points in just over a week. That’s something that doesn’t normally happen in a risk-off market, leaving experts wondering why bond buyers were suddenly cooling on the safety of Treasuries. 

Chart 1: News and moves in U.S. 10-year rates and the Nasdaq-100 over the past two weeks

Click here to see larger image

Many other markets also saw dramatic repricing. High yield bonds saw their credit and bid-ask spreads rise. Crypto assets, oil and the U.S.-dollar also fell. Gold was one of the few assets to rally.

Volatility is high, but not at a record

As the market sold off and uncertainty increased, the VIX (implied volatility) index spiked. 

Since the VIX index was created in 1992, there have been many large spikes. The closing high set this month, at just 52.3, is far from a record (grey area below).

We have noted before that volatility drives stock spreads — and, therefore, trading costs — higher. That’s because market makers are more likely to lose to adverse selection and informed traders in a fast market.  

Interestingly, bid-ask spreads also increased over the past two weeks, and are closer to record levels since 2017. The data also shows that S&P 500 spreads had, in fact, been increasing ahead of the spike in VIX (purple dots below) – rising consistently since 2024. 

Chart 2: U.S. spreads were widening before the recent spike in VIX

Stock volumes climb to new records

As markets moved, trading volumes also spiked. In fact, the period since the U.S. election has seen nine of the top 10 volume days ever. A new record of almost 31 billion shares traded on April 9, more than double the average from last year.

As we often see in fast-moving markets, less traders are willing to wait until the close to trade. 

MOC volumes fell during the volatility of Covid, but they had been trending up ever since, averaging almost 6% of daily volume on a normal day. The past week, MOC volumes fell below 5% of total daily volumes (blue dots below).

Chart 3: Nine of the top 10 largest trading days ever have taken place over the past four months

Options volumes hit new records as put trading increases

Option trading also increased, setting a new record for contracts traded (with 101.9 million contracts traded) on April 4, 2025, which was the second day after the U.S. announced retaliatory tariffs.

The put-call ratio also increased quickly, showing that trading became much more focused on puts, which offer downside protection to investors (green dots below, axis inverted).

Chart 4: Put-call ratio signaling investors relatively less bearish than previous periods of market stress

Retail sold (for just a few days) after the tariff announcement

Retail traders had been mostly buying stocks in 2025, even as the market sold off through February (dark green line). 

After the reciprocal tariff announcement, data shows a number of days with significant net retail selling. Some of those days also saw more broad-based selling, with most sectors being net sell. However, it was partly offset by some days of large (over $1 billion) dip buying, too.

Chart 5: Retail consistent dip buyers up until retaliatory tariffs were announced

A reminder on how market protections work

Volatility like this in markets is not new.

Importantly for investors, the stock market has a number of guardrails designed to slow sell-offs caused by uncertainty-driven sell-offs, including:

1. Market Wide Circuit Breakers (MWCB), which halt all stocks for 15 minutes when the market falls significantly. These are designed to give buyers a chance to understand the impact of news and better assess new fair values for buying. These are triggered by intraday falls (but not rises) in the S&P 500 Index, and work as the table below shows. We highlight that the market saw four MWCBs during the Covid sell-off in March 2020. 

2. Limit Up/Limit Down (LULD), which are designed to stop excess volatility in each stock, separately. When a stock moves down (or up) very quickly, that stock is first put in a “limit state,” where additional selling (or buying) can’t move the price more, but offsetting orders can bring the stock price toward earlier price levels. If that doesn’t happen after 15 seconds, the stock is halted for 15 minutes and reopened with an auction.

Table 1: How MWCB, LULD and CE guardrails work

3. Clearly Erroneous (CE) rules exist to allow for obvious error (like “fat-finger”) trades to be busted. However, thanks to the existence of LULD bands, where markets won’t match stocks lower (or higher) than the LULD bands, CE trades are relatively rare. 
4. Short-selling rules also affect stocks that have fallen 10% in a day. For that and the next day, a variation on the old “uptick rule” applies, banning short selling at the bid, thereby ensuring short sellers can’t force bid prices down via trades.

There is likely more uncertainty ahead

Volatility has calmed since the 90-day extension of reciprocal tariffs. However, final tariffs are far from known, which means we may see more periods of uncertainty (and trading spikes) throughout 2025.