More than $6 trillion was wiped from the stock market in just two days.The Dow closed the week with a 2,200-point drop.The S&P 500 sank 6%.
Suffice it to say, it was a brutal week for investors.
President Trump’s “Liberation Day” tariffs turned out to be even more disruptive than most analysts had expected — and the damage to the market has been dramatic.
“The bull market is dead, and it was destroyed by ideologues and self-inflicted wounds,” Emily Bowersock Hill, CEO and founding partner at Bowersock Capital Partners, told CNBC.
“While the market may be close to the bottom in the short term, we are concerned about the impact of a global trade war on long-term economic growth.”
Volatility spiked across the board. The Cboe Volatility Index (VIX) jumped 51.4% on Friday, briefly hitting 45.46 — the highest level since April 7, 2020, at the height of the COVID crash, when the VIX closed at 46.70.
“Thursday’s historic selling pressure in stock markets is not an overreaction,” José Torres, senior economist at Interactive Brokers, told Seeking Alpha.
“Recessions have generated significant drawdowns in equities in the past. An economic downturn is now an even chance — and the odds increase the longer the administration holds the line on these trade measures.”
Here’s how some of the most widely held S&P funds performed last week:
- ProShares UltraPro S&P500 (UPRO): –17.4%
- ProShares Ultra S&P500 ETF (SSO): –11.97%
- iShares Core S&P 500 ETF (IVV): –6%
- SPDR S&P 500 ETF Trust (SPY): –5.85%
- Vanguard S&P 500 ETF (VOO): –5.8%
- Invesco S&P 500 Equal Weight ETF (RSP): –5.6%
Meanwhile, inverse ETFs — funds that bet against the S&P — all finished the week in the green:
- ProShares UltraPro Short S&P500: +18.2%
- ProShares UltraShort S&P500: +12.1%
- ProShares Short S&P500: +6.1%
Torres said the White House “has accepted the risks of a painful transition,” and is prioritizing medium- and long-term outcomes over short-term stability.
“The short term is looking especially gloomy,” he added, pointing to cost pressures from tariffs and austerity measures — including cuts to public-sector jobs and social programs — that are weighing heavily on consumer spending, hiring, and business investment.
And if you’re thinking about buying the dip — market legend Bill Gross has a warning.
In an email to Bloomberg, the retired PIMCO co-founder compared the current situation to the end of the gold standard in 1971 — but with “immediate negative consequences.”
“This is an epic economic and market event,” Gross said. “Trying to buy the dip here is like trying to catch a falling knife.”
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