Traders are aware that they are in a risky profession, capable of wrecking your nerves, especially when the markets get tough because volatility is something unexpected. Certainly not the first blow. It is then when every investor remembers the investor sentiment curve, that graph that illustrates in black and white how one goes from euphoria to correction with the first falls, which in turn leads to negativity and then market panic. From there, the only way is to recover. The problem is that it is never certain when there has been enough terror in the market, the kind where there is almost nothing left to sell and almost everything to buy. In fact, it is said that when a major investment bank takes the stage to recommend either action, it is because they have already done it themselves.
It is tempting to imagine how the last four weeks have been at trading desks around the world. How the phone has not stopped ringing. How the hours became endless, especially for European brokers who became more attentive to what was happening on Wall Street in our evening-night thanks to each new unexpected, incomprehensible statement from Donald Trump. The US president has introduced such volatility and unease in the market that in his first three months in office, he has managed to make money flee from the dollar and US bonds because they are no longer considered safe, for gold to shine brighter than ever, above $3,500 per ounce, and for the fear index, the VIX (which measures the implied volatility of the S&P 500), to reach levels not seen since the pandemic.
One month after the Trump hurricane, how have traders experienced the volatility of the stock markets in April? Have the phone lines collapsed under so many calls of concern from clients? The market has been tumbling over the last month. Since Donald Trump announced his new tariff policy on April 2, the Spanish stock market has experienced movements of more than 2% -up or down- in seven of the 16 sessions since then (until the publication of this magazine). The worst days were undoubtedly Friday, April 4, when the Ibex plummeted by 5.83%, and dropped another 5.12% on Monday, April 7, renamed Black Monday by analysts. On April 10, it rose by 4.3% following the president's announcement of the tariff pause.
These movements have been even more extreme on Wall Street and within the Nasdaq 100, where technology companies have experienced terrifying sales in recent weeks. In two days, April 3 and 4, the index dropped by nearly 12%; it also rebounded by 12% on the day Trump announced the 90-day impasse, and if we look back, more than half of the days saw their companies experience movements exceeding an average of 2% since then. Not for the faint-hearted.
"The market will always penalize what it does not know. It happened with the 9/11 attacks, and yet, the stock market ended up rising on the day of the 11-M in Madrid or the London metro bombing (July 7, 2005) where the Footsie 100 also rose. In the first Gulf War, the stock markets also fell, but with the war in Ukraine, the market did not, at least not as a result of that, beyond natural gas. Everything that is already known from other occasions does not receive much attention," says Roberto Moro, an independent trader, who acknowledges that this time has been different. "There was a specific moment when there was a risk of the stock markets collapsing. This is not a temporary correction," says the expert. And it is not because, although Donald Trump is not new to anyone, there was a certain sense of bravado that would never go further... until the famous April 2 when he announced, with a list in hand, the tariffs for 75 countries, which are currently on standby in his famous 90-day pause, with less than 60 days remaining.
Certainly, it is not common for a US president to cause 6% plunges or 9.5% increases with every word, as the S&P 500 experienced in a span of three sessions. But this is the new normal. "It really does not sink in the market that this is a crisis, a real one. People are eager for the market to fall so they can enter," says Álvaro Huerta, Premium client manager at the British broker IG, who acknowledges that the pandemic helped improve the financial knowledge of Spaniards, especially in interpreting how markets work. "With this sort of market crisis in April, I am pleasantly surprised by the financial education people have. They are aware that not everyone wins, only about 20% to 25% of investors do.
On April 7, the black Monday of the stock markets, IG recorded the highest trading volumes globally of all time, surpassing what was experienced during the week of the declaration of the State of Alarm in the 2020 pandemic. "There were millions of transactions crossed in a matter of hours," says Huerta.
Juan José del Valle, from Activotrade, confirms that "April has been a heart-stopping month for both investors and us (...) There has been a lot of nervousness, although it is true that during the last week everything has calmed down quite a bit, with more conservative metrics. With the VIX in the 25 zone as long as Trump leaves us alone. In these circumstances, investors are so nervous that we often have to play the role of psychologists." It is worth noting that sometimes people not only lose what they invested but also money they do not have because they decide to trade on leverage, that is, being in debt two times or more of what they have in their portfolio... you win double, but you also lose double.
It is estimated that there are around 6 million shareholders in Spain. Families own about 16% of the national market and are also the hardest hit in times of volatility because they are the last to find out. During sharp declines, it is often even more challenging for them to find entry and exit points. The issue is that during flash crashes, like those experienced in recent months, the market wipes out the stops (limit levels for investors to contain losses, generally) and many of them are left out of the market, with huge losses due to volatility. "There were moments when this nervousness dragged everything down. It is no longer about where to trade but where to properly place the stop due to volatility because it might trigger prematurely. It has been very challenging, and those who could afford it, have watched from the sidelines," says Moro.
The sweep of the bulls, the market's optimists, has reignited investors' interest in American technology. The plunge seen in the Magnificent Seven -not only in April but throughout the year- has brought back the appeal to these companies that, although still expensive now, were even more so before. At the market's lowest point, companies like Nvidia were facing losses of 30% for the year, with Tesla in the spotlight. Elon Musk's company's shares plummeted by 45%. Today, they are down by 30% after regaining ground in the last two weeks. Sales exceeded 20% for Alphabet and Apple, or 15% for Microsoft.
Huerta, who caters to clients with portfolios exceeding 100,000 euros, acknowledges that "the most traded assets are Nasdaq because many people are very interested in entering with these types of declines" and also in gold "because it is also evident that the dollar is not acting as a safe haven. Last week, on Monday, we saw prices of 1.16 [in its exchange against the euro]. It is also worth noting that gold has an inverse relationship with the dollar," leading to "record levels," even after adjusting for historical inflation, of around $3,500. The golden metal is currently trading $200 below, with a more than 40% increase in 2025. "Our clients are small investors, and gold has also been one of the trending topics. It is currently a niche market for anything related to seeking refuge or portfolio hedging; defensive sectors with less volatility or currencies like the Japanese yen or Swiss franc," explains Del Valle, which have seen increases of more than 10% against the dollar this year.
Óscar Naveiras, a Popular Investor on eToro with over 11,000 followers and a portfolio of 250,000 euros invested, admits that he had been preparing beforehand for the declines seen in the US market. The investor does not understand why Bitcoin did not act as a refuge in this crisis because he believes that "in the long term, it is expected to behave like gold and not like the stock market." In three sessions, the digital currency plummeted by 9%, from April 3 to 7. Since then, it has surged by another 22%, reaching close to $95,000.