The Trump Effect: How Tariffs Rocked Global Equity Markets - in Five Charts
First published in Euromoney, 16 April, 2025
Dr Elliot Banks, Chief Product Officer, BMLL Technologies
On April 2nd, 2025 - dubbed “Liberation Day” by Donald Trump - the United States launched a sweeping round of tariffs, targeting virtually every trading partner. The move, aimed at rebalancing global trade, has triggered waves of volatility across financial markets, sending tremors through trading floors from Shanghai to São Paulo.
In the ten days since the announcement, global equity markets have gyrated wildly. Using five charts, we examine the magnitude and character of the market's response - through trading volumes, message traffic, and options activity.
1. Trading Volumes Surge Worldwide
Volatility, unsurprisingly, tends to bring with it a rise in trading activity. In the wake of the tariffs, volumes surged, with the United States and China leading the charge. Hour-by-hour data shows a sharp spike in transactions, particularly around key news cycles and reopenings.
Notably, Chinese volumes jumped on April 7th following a long weekend closure, amplifying pent-up demand. The increase in volume was not confined to any single region, highlighting the truly global nature of the policy shock.
2. Market Data Traffic Hits New Highs
Greater trading activity leads to greater activity in the market’s plumbing. Nowhere is this more visible than in market data traffic. In the US equity market, order book updates (the number of order book insertions, updates or cancellations) - skyrocketed from 2 billion messages in February to nearly 9 billion by April 7th.
These updates, encompassing the constant churn of bids, offers, and cancellations, reflect a market operating at fever pitch.
3. Frenzied Activity Across the Trading Day
The escalation in message traffic was not limited to specific market windows. Minute-by-minute data throughout the trading day of the US equity market reveals elevated activity from open to close, a sign of sustained trader engagement and algorithmic activity attempting to navigate fast-moving conditions.
Such across-the-board intensity suggests this was not a momentary panic but a structurally disruptive event.
4. Circuit Breakers Kick In
When markets become too unruly, circuit breakers - mechanisms designed to slow or halt trading - kick in. These are recorded as “unscheduled auctions” in the BMLL datasets. Since the start of the year, these have risen dramatically.
On April 7th alone, more than 80,000 such events were observed globally, up from fewer than 1,000 in January. This represents a remarkable increase in the number of stocks exhibiting large volatility and dramatic price changes.
5. Options Traders Turn Bearish
Moving away from equities, another telling indicator of sentiment can be found in the options market. Using data from OPRA, which covers all US equity options, we observe a spike in the put-call ratio—the volume of put options traded relative to calls.
Following “Liberation Day,” the ratio surged above 1, indicating a marked shift toward bearish positioning, before easing slightly by April 11th. The options market captured the anxiety of investors preparing for further downside, and highlights the bearish sentiment in the market.
Tail Events in Real Time
The impact of "Liberation Day” has served as a powerful reminder that market “tail events”, events that cause extremely large price movements, are a reality of financial markets. Whether in the form of message spikes, halted stocks, or bearish derivatives trading sentiment, the aftermath has tested the resilience of global markets.
For investors, these episodes underscore the importance of high-quality historical market data. Understanding how markets behave in the outer reaches of volatility is no longer academic - it is essential for navigating a world where policy shocks can materialise overnight.