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- The S&P 500 surged 6% in five days, its weekly biggest gain since 2023.
- But that hardly tells the full story. It was a wild week featuring historic volatility.
- Everything from stocks, bonds, and the dollar was rocked by Trump's trade war.
Shocking stock-market volatility, chaos in the bond market, and a plunge in the dollar — this week in markets is destined for the history books.
The S&P 500 wrapped up its best week since November 2023 — but that doesn't begin to tell the story of the tariff-fueled roller coaster ride that investors were sent on.
Here's where US indexes stood at the 4:00 p.m. closing bell on Friday:
S&P 500: 5,363.26, up 1.81%
Dow Jones Industrial Average: 40,212.71, up 1.56% (+618.99 points)
Nasdaq Composite: 16,724.46, up 2.06%
Stocks plunged and soared daily as Wall Street tried to assess the impact of the Trump administration's shifting tariff announcements.
"It is very difficult to provide any type of guidance, given the current macro backdrop, and it seems that we go from panic to euphoria to terror," Edward Moya, senior market analyst at AlphaSense, told Business Insider.
Here's how the week played out.
Monday
After suffering its worst losses since the pandemic last Thursday and Friday, the stock market entered the week staring at even more red.
Right off the bat, the market's top voices were decrying the trade war as a bomb thrown in the middle of an otherwise fairly healthy market. Among them was hedge fund manager Bill Ackman, who warned of "economic nuclear war" if Trump didn't negotiate a deal.
Suddenly, after briefly entering bear market territory in the morning, the S&P 500 sprang up 8.5% in less than an hour. The catalyst was a headline suggesting that the White House was considering a 90-pause on the tariffs, something the administration quickly clarified was "fake news."
It demonstrated how starved investors were for any hint of news that could stem the brutal losses.
"'Since the pandemic, we really haven't seen such violent swings," Moya said, noting that tariff policies have been dramatically altering forecasts, whether regarding a recession or the likelihood of interest rate cuts.
The market whiplash ended with the S&P 500 down 0.23% for the day.
Tuesday
Though the market opened higher, indexes took another massive tumble through Tuesday. Despite news of an emerging trade deal with Japan, early-day gains were erased after Trump ramped up tariffs on China to 104% in a mounting tit-for-tat conflict.
China vowed to "fight to the end," with investors facing the growing possibility that a trade war between the world's two biggest economies was set to spiral.
After initially soaring on optimism around trade negotiations with Japan, the market tanked again, erasing a 4% gain to push the S&P 500 down 2.19% by the closing bell.
Wednesday
By the middle of the week, the bond market was adding to the chaos.
While major stock indexes continued their slide, long-dated Treasury yields started to spike, an unusual occurrence when uncertainty is high and people are worried about a recession.
The 10-year Treasury yield jumped as high as 4.5%. When yields rise, bond prices fall, indicating that traders were dumping US debt.
The sudden spike in yields—which is the opposite of what Trump and his team have said they want— was enough to get the president's attention.
With yields up, Trump announced a 90-day pause on reciprocal tariffs, though he raised China's tariff rate and kept a baseline 10% duty on most imports.
The market's relief was immediate.
Within minutes, the S&P 500 was up 7%, and it went on to rise 10% for the day, its best gain since 2008. That was trumped by the Nasdaq, which saw its biggest single-day rise since 2001. The Dow, meanwhile, gained almost 3,000 points.
Thursday
After the frenzy, commentators noted that it was the bond market that ultimately pushed Trump to pause the tariffs. The president and his team even said as much, telling reporters that they were watching the yields.
The bond vigilantes had seemingly won
Unfortunately for investors, reality set in once Thursday's trading session kicked off, with China's huge tariff rate in focus and more questions than answers amid the pause in the trade war.
"Now we have potentially 90 more days of uncertainty, and that's just going to potentially cause less business capital expenditures, less hiring plans, maybe even moderate consumer spending," Eric Sterner, chief investment officer for Apollon Wealth Management, told BI.
Indexes dropped sharply again, at one point giving back most of the gains from Wednesday's session as the White House clarified China's tariff rate was actually 145%.
The S&P finished 3.5% lower for the day, the Dow lost 1,000 points, and the Nasdaq shed 4%.
Meanwhile, the US dollar accelerated its plunge, suggesting that US exceptionalism was waning amid the bout of confidence-shattering volatility. Even as some analysts rescinded their recessionary outlooks, bond yields weren't budging much.
"I still think the US hasn't lost its status as to safe haven, whether it's the US, dollar or Treasurys, but it is concerning, and I think the more combative we become with the rest of the world, the less reliant they're going to be," Sterner said.
Friday
By the end of the week, investors were feeling the fatigue.
"I'm not enjoying this week. I tell you what, there were a couple of nights covering I was up until about three," Moya said.
The week wound down with a fresh rise in Treasury yields, but yet again, investors changed course, with the S&P 500—improbably—on track for its best week since 2023 as traders headed toward the close.
Optimistic signals from the White House about a deal with China served as an adrenaline boost for investors, though it did nothing to slow the bond market sell-off.
What happens beyond this week is a big question, and whether the stock market finds a bottom to rally from or if the trade war volatility continues.
"I just wasn't expecting, like many people, that this tariff fatigue would last so long. But that's where we are," Sterner said.
"There's a lot of historic moves. It's difficult to quantify," Moya added. "And it seems that we're waiting for the next tweet, the next Truth Social post, to determine what is going to be the noise and is it something that could really derail or provide some relief?"