On Wednesday, April 2, in the evening, President Donald Trump had just made an appearance in the White House Rose Garden while holding a big sign that listed the harsh tariffs he was imposing on nations all over the world.
It soon became apparent on Wall Street that Trump was serious about dismantling an international trading system that he claimed was biased against the United States.
Ellerbroek, a portfolio manager at Argent Capital Management, sought to predict what would happen next over dinner with his family and into the night as Asian markets plummeted, starting a global crisis.
The following morning, he and his group gathered at their St. Louis office to try to figure out how this might affect their stock holdings. Amazon.com Inc., their biggest holding, fell almost 10% as the selloff raged that day.
Ellerbroek was receiving a furious crash course in handling what would be an exceptionally volatile year, much like investors from Tokyo to New York.
The S&P 500 Index plummeted to the edge of a bear market. Then, just as swiftly, attitude changed, triggering one of the fastest market recoveries in decades and propelling the benchmark back to all-time highs. The main takeaway was that it was beneficial to not panic or to take the risk of buying the dips.
Both the US economy's ups and downs and the surge in artificial intelligence were factors. However, the White House was largely to blame.
Regarding the impact of the Trump administration on markets, Irene Tunkel, chief US equity analyst at BCA Research, stated, "Volatility is a feature, not a bug." "Those who were very nimble, very humble, and very willing to incorporate new information were rewarded this year."
On January 26, venture entrepreneur Marc Andreessen described it as "AI's Sputnik moment." The current US IT boom seemed to be in jeopardy after DeepSeek, a Chinese startup, launched a potent, seemingly inexpensive AI program.
Nvidia Corp.'s shares fell 17% when US markets opened the following day, a Monday, eliminating roughly $600 billion from their value in the biggest market wipeout in history. The day was the worst for semiconductor equities since March 2020.
While driving to CNBC for a televised interview, Nancy Tengler, the head of Laffer Tengler Investments Inc., said her heart raced as she went through her phone in an attempt to catch up with the news. She claimed that when the specifics became apparent, she thought, "This is an opportunity."
She, like several others, had doubts about DeepSeek because she believed its cost projections were inflated. During her TV interview, she expressed optimism about IT stocks.
Her company bought stock in Nvidia and other popular AI companies. It was a wise decision. DeepSeek did not halt the torrent of big-tech expenditure to create the technology or sound the death knell for the American approach to AI. Within a month, the Nasdaq 100 Index returned to a record high, and in 2025, it gained 21%. This year, Nvidia has increased by 40%.
Garrett Melson was shocked at first. The brief respite of gallows humor followed in the hours that followed as markets plummeted and social media users attempted to piece together just what Trump had just done: As was quickly discovered, Trump's trade war has even gone so far as to penalize penguin-populated uninhabited islands close to Antarctica.
Melson, a portfolio strategist at Natixis Investment Managers Solutions, remarked, "There are moments when you have to laugh a little bit when you see a sea of red on your screen."
Since the pandemic began shutting down the US in March 2020, it was the largest two-day shock to international markets. Days of panicky selling ensued as China reacted, recession concerns erupted, and Treasuries fell, departing from their usual safe haven function, as Trump's readiness to question the stability of US government debt raised concerns.
Following the president's announcement, Melson and his colleagues worked late into the night and throughout the weekend, doing analysis, gazing at charts, and producing comments for clients. The group included more US stocks and corporate bonds to one portfolio model.
On April 4, Ellerbroek emailed the Argent investment team. He wrote, "This is a scary moment." "If you had to choose between the beginning and the end of this episode, I would probably say the beginning."
Because there was just too much uncertainty, Ellerbroek held onto his investments and refrained from purchasing beaten-down companies.
A effort to monitor the consequences was initiated by Neil Sutherland, a fixed-income investor at Schroder Investment Management, and his associates.
As Trump continued to unleash additional salvos, they updated the average US tariff rate on impacted nations, predicting the implications for asset prices and communicating their results to nervous customers. They eventually gave up.
Sutherland remarked, "It simply became meaningless because it would change in the span of five minutes." "We simply had to acknowledge that it's a moving target."
The BCA stock strategist Tunkel had taken the day off to look for a home in Boca Raton, Florida. With the S&P 500 moving sideways, it had been a comparatively calm day for stocks. However, she listened to the radio the entire three-hour drive from her Gulf Coast home in Venice.
The panic that had settled upon Wall Street days before swiftly gave way to euphoria when she paused for lunch and tuned out. At 1:18 p.m., Trump declared he was delaying many of his tariffs for ninety days after the bond-market selloff caused anxiety in Washington by driving up interest rates. The S&P 500 saw its largest one-day increase since October 2008, rising 7% in less than ten minutes before gaining 9.5%.
"I think this is something that is historical," Tunkel remarked, referring to the size of the reactions to the news. "We'll never forget those times."
From his position at the New York Stock Exchange, Jay Woods, chief market strategist at Freedom Capital Markets, witnessed the event firsthand.
When the first noise subsided, he got ready to greet some guests. He was instructing a technical analysis course at Fordham University. It just so happened that he had planned a field trip for his pupils.
By the time they got there, almost everything on the Big Board was green, with the VIX, the so-called fear gauge, being one of the few exceptions. Brokers' desks were always ringing with alerts, some of which had the sound of a cash register chime.
The day created what became known as the TACO trade short for Trump Always Chickens Out a pattern that would recur over the course of the following few months.
His greatest tariff threats began to be discounted by traders, who assumed they were only a negotiation ploy. Thus, selloffs were opportunities for purchases.
One of Woods' students, Chase Games, was enthralled with the thrill. According to Games, going to the exchange was "obviously a huge dream of mine." "I was fortunate."
He began an internship with Woods' company, Freedom Capital, in October. Mark Malek of Siebert Financial was celebrating his recent birthday on a Saturday night in New Jersey when he discovered that the US had bombed Iran's nuclear facilities, a move that traders feared could severely intensify the Middle East's crises.
At the Asbury Park French restaurant, Malek told his family, "If this is true, my phone is going to ring." It eventually did. Malek made the irrational play that equities would increase despite all the hazards.
As traders began to worry about an escalating conflict between Iran and Israel, the S&P 500 had already recently declined. However, he believed that the market would eventually react with relief and that the US would not expand the conflict from there.
As Trump got closer to a truce, the S&P 500 did, in fact, rise by around 1% on Monday and again on Tuesday. It continued to reach yet another record high at the end of the week. "What's happening?" As cryptocurrency markets plummeted, Jeff Dorman pondered.
Risk assets were being dumped by traders after Trump threatened to impose an additional 100% tariff on China. Additionally, as leveraged bets were unwound, Bitcoin, which had just surpassed $125,000, was declining.
At Arca, a cryptocurrency asset company where Dorman serves as chief investment officer, Slack messages piled up. He was at home, but before long, he was on a Zoom call with his team.
They devised a strategy to purchase assets that had fallen in value in order to cover short bets. When they first started investing together, it would have taken them all night.
They had mastered the art of creating a plan and letting their traders carry it out after years of experience. After assessing the situation, the CIO went to bed and "slept like a baby."
Dorman is still optimistic about certain areas of the cryptocurrency industry. However, for the time being, the excitement surrounding cryptocurrency that gripped markets for a large portion of the year as Trump supported the sector has subsided.
Additionally, it has rejected the buy-the-dip strategy that has proven successful in other places in 2025. Other well-known cryptocurrencies have fallen during the last two months, and Bitcoin is on its way to its first yearly decline since the 2022 crash.
Shares related to cryptocurrencies, such as the stockpiler Strategy Inc. and the Trump family-affiliated American Bitcoin Corp., have suffered as a result.
As concerns about frothy AI valuations and the Federal Reserve's rate-cut path weighed on the S&P 500, it appeared as though the retreat from risk was set to pull down the entire stock market.
The concerns were short-lived. Anticipating that the cooling labor market would encourage the Fed to continue relaxing monetary policy, as it did at its meeting on December 10, stocks began to rise on November 21.
In the meantime, despite Trump's trade war, job losses for federal employees, and a confrontation in Congress that resulted in a record-long government shutdown, the economy has continued to defy recession worries.
Despite all the hype, the AI boom has not collapsed. Additionally, it is anticipated that the person Trump selects to succeed Fed Chair Jerome Powell in 2019 will support Trump's demand for even quicker rate reductions.
As we approach 2026, that has planted a late-year hope. Wall Street strategists predict that the S&P 500 will rise for a fourth consecutive year after this year's gains hurt those who stuck to negative projections. That would be the longest winning run in almost 20 years if they are correct.
"There's a sigh of relief that we've gotten through some of the biggest waves that were thrown at this market," stated Woods of Freedom Capital. Olga Kharif, Ye Xie, Carter Johnson, Alexandra Semenova, Michael MacKenzie, and Yvonne Yue Li provided support.
