2025 Tariff Shock (the "Liberation Day" Crash)
February 19 – April 8, 2025
Duration: 7 weeks (from Feb 19 record close)S&P 500 DRAWDOWN
−19%
peak to trough
2025 Tariff Shock at a glance
| Period | February 19 – April 8, 2025 |
|---|---|
| Duration | 7 weeks (from Feb 19 record close) |
| S&P 500 peak to trough | -19% |
| Time to recover prior high | 11 weeks: the S&P 500 closed at a new record on June 27, 2025 |
| Trigger | "Liberation Day" reciprocal tariffs on nearly every US trading partner (April 2), Chinese retaliation, a Treasury sell-off that pushed the 10-year yield from 3.9% to 4.5% in a week |
Sources: S&P 500 historical records, Federal Reserve archives, index providers' data. Updated 2026-10-19.
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What Happened
TRIGGER
"Liberation Day" reciprocal tariffs on nearly every US trading partner (April 2), Chinese retaliation, a Treasury sell-off that pushed the 10-year yield from 3.9% to 4.5% in a week
The fastest large drawdown since 2020, and the one that showed bonds can stop hedging in a single week. The S&P 500 had already slipped from its February 19 record on tariff headlines; the April 2 announcement of 10% universal tariffs plus "reciprocal" rates of up to 50% erased about 12% in four sessions. Treasuries rallied at first, then sold off hard on April 7-9 as leveraged basis trades unwound and the dollar fell. On April 9 a 90-day pause for everyone except China sent the S&P 500 up 9.5% in a day, its best session since 2008. The index closed at a new record on June 27, eleven weeks after the trough.
Key Facts
- 01S&P 500 fell 19% from its February 19 record close to the April 8 close (21% intraday on April 7)
- 02April 3 and 4 were the worst two-day stretch since March 2020: roughly $6.6 trillion of US market value erased
- 03The VIX, already near 30, rose into the mid-50s on April 7-8
- 04The 10-year Treasury yield rose from about 3.9% to 4.5% between April 4 and April 9: bonds fell with stocks
- 05April 9: a 90-day pause on most reciprocal tariffs; the S&P 500 gained 9.5%, its best day since 2008
- 06US tariffs on Chinese goods escalated to 145% before the May 12 Geneva truce cut them to 30%
- 07The S&P 500 closed at a new all-time high on June 27, 2025, 11 weeks after the trough
How did each asset class perform during the 2025 Tariff Shock?
Peak-to-trough return of the ETF proxy for each asset class, February 19 – April 8, 2025. The same numbers power the free stress test.
How did US Equities perform?
| US Growth (VUG) | -23% |
| US Tech (QQQ) | -23% |
| US Small Cap (IWM) | -23% |
| US Cons. Disc. (XLY) | -22% |
| US Total Market (VTI) | -20% |
| US Energy (XLE) | -17% |
| US Industrials (XLI) | -16% |
| US Financials (XLF) | -16% |
| US Value (VTV) | -14% |
| US Healthcare (XLV) | -9% |
| US Cons. Staples (XLP) | -6% |
How did International Equities perform?
| South Korea (EWY / MSCI Korea) | -16% |
| China (FXI / FTSE China 50) | -16% |
| EM Asia | -14% |
| EM Equities (broad) | -14% |
| Japan Equities (EWJ) | -11% |
| Intl Developed Mkts (EFA) | -11% |
| France (EWQ / CAC 40) | -10% |
| EU Equities (broad) | -10% |
| Italy (EWI / FTSE MIB) | -10% |
| UK (EWU / FTSE 100) | -9% |
| Germany (EWG / DAX 40) | -8% |
| Spain (EWP / IBEX 35) | -2% |
| India (INDA / MSCI India) | -1% |
How did Fixed Income perform?
| High Yield (HYG) | -5% |
| EM Bonds (EMB) | -4% |
| Corp Bonds IG (LQD) | -2% |
| Aggregate Bonds (AGG) | +0% |
| Gov. Bonds Long (TLT) | +0% |
| TIPS (Inflation-linked) | +1% |
| Gov. Bonds Short (SHY) | +1% |
How did European & UK Fixed Income perform?
| EUR Corp Bonds HY | -5% |
| Italian BTP 10Y | -2% |
| EUR Corp Bonds IG | -1% |
| German Bund 10Y | 0% |
| UK Gilts 10Y | +0% |
How did Alternatives perform?
| Infrastructure (IFRA) | -14% |
| Managed Futures (CTA) | -8% |
| Tail Hedge (Volatility) | +27% |
How did Real Assets perform?
| REITs (VNQ) | -13% |
| Commodities (DJP) | -11% |
| Silver | -9% |
| Gold | +2% |
How did Digital Assets perform?
| Ethereum | -46% |
| Bitcoin | -21% |
How did Megatrend ETFs perform?
| Genomics (ARKG) | -38% |
| Semiconductors (SOXX) | -33% |
| Cloud Computing (SKYY) | -31% |
| AI & Robotics (BOTZ) | -29% |
| EV & Mobility (DRIV) | -26% |
| Cybersecurity (CIBR) | -19% |
| Water Resources (PHO) | -14% |
| Clean Energy (ICLN) | -7% |
How did Cash perform?
| Cash / Money Market | 0% |
How did UCITS European ETFs perform?
| Invesco EQQQ NASDAQ-100 UCITS (EQQQ) [UCITS] | -23% |
| iShares Core S&P 500 UCITS (CSPX) [UCITS] | -19% |
| iShares MSCI World UCITS (IWDA) [UCITS] | -18% |
| Vanguard FTSE All-World UCITS (VWRL) [UCITS] | -18% |
| iShares MSCI EM UCITS (IEMG) [UCITS] | -15% |
| Xtrackers Euro Stoxx 50 UCITS (XESX) [UCITS] | -12% |
| Vanguard FTSE Dev. Europe UCITS (VEUR) [UCITS] | -12% |
| Invesco Physical Gold ETC (SGLN) [UCITS] | -2% |
| Xtrackers Eurozone Govt Bond UCITS (XGLE) [UCITS] | -1% |
| iShares Core EUR Aggregate UCITS (IEAG) [UCITS] | 0% |
How did Fondi Iconici perform?
| ARK Innovation ETF (ARKK) | -38% |
| SPDR S&P 500 ETF (SPY) | -19% |
| Vanguard S&P 500 (VOO) | -19% |
| Vanguard FTSE All-World UCITS (VWCE) | -17% |
| Berkshire Hathaway (BRK.B) | +2% |
How did Mercati Geografici perform?
| Australia (EWA) | -17% |
| Southeast Asia (ASEA) | -14% |
| Canada (EWC) | -12% |
| LatAm Equities (ILF) | -11% |
| Brazil (EWZ) | -10% |
| Mexico (EWW) | -8% |
| Switzerland (EWL) | -7% |
How did Smart Beta / Factor perform?
| US Momentum (MTUM) | -21% |
| US High Dividend (VYM) | -15% |
| US Min Volatility (USMV) | -9% |
How did Commodities & Bond Specializzati perform?
| Crude Oil WTI (USO) | -18% |
| Convertible Bonds (CWB) | -11% |
| Agriculture (DBA) | -10% |
Sector Breakdown
HARDEST HIT SECTORS
MOST RESILIENT SECTORS
Recovery Timeline
11 weeks: the S&P 500 closed at a new record on June 27, 2025
Time from trough to prior all-time high
PORTFOLIO STRESS TEST
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