Illustration: Zohar Lazar
It was lunchtime at the New York Stock Exchange, and Peter Tuchman was standing on a balcony surveying the scene, one side of his unruly white hair flaring up jaggedly like a market chart. It was Wednesday, April 9, a week after President Donald Trump announced a series of astronomical tariffs on nearly every country in the world, including tiny Antarctic islands inhabited only by penguins, seals, and other wildlife. The S&P 500 was eerily flat for the day, but the so-called Fear Index — or VIX, a measure of the market’s volatility — was disturbingly high, as if what Tuchman was observing were an ocean whose glassy surface belied the currents swirling dangerously below. Tuchman has worked on the floor of the NYSE for 40 years — through 1987’s Black Monday, the dot-com bust, the Great Recession, the pandemic — and had never seen anything play out quite like the crash of the past week. “People are, you know, freaking a bit,” he said. “I mean, everyone in here has probably got a 401(k), and suddenly their 401(k) is a 101(k).”
The NYSE has always been a place friendly to the conservative, pro-business side of the political ledger, but lately it has become a lot Trumpier. In one firm’s booth, MAGA hats hung on neat white hooks above each Bloomberg terminal and TRUMP was emblazoned on the mouse pads — what Tuchman called the MAGA Pavilion. Recent events, however, had required some extreme mental gymnastics to justify the sledgehammer effect Trump’s tariffs have had on everything from the traders’ retirement savings to the global economic order, which just a week before rested on that rock-solid pillar known as the United States of America. “Most of the floor are Trumpers, and they still think this makes sense, and I still don’t get it,” Tuchman said.
Even those financiers sympathetic to Trump were having doubts, though. The president had declared the tariffs a “Liberation Day,” but Wall Street acted as if it were Armageddon, sending stocks plunging and erasing more than $10 trillion from global markets at historic speed. “More like ‘Obliteration Day,’” groused Anthony Scaramucci, the hedge-fund manager who was fired after serving only 11 days in the first Trump administration. “It appears to be the largest set of negative fiscal policies that have been pursued in 100 years,” said Bob Elliott, who runs an investment firm called Unlimited and previously oversaw portfolio strategies for Bridgewater, the world’s largest hedge fund. Elliott, a familiar face on FinTok, where he makes daily finance videos often while walking his dog and wearing a Black Dog sweatshirt, had been predicting a 20 percent market decline, only to see his thesis play out more quickly and violently than he’d envisioned. “I was expecting disappointment, and we got disaster,” he said.
The daily whipsaw induced by the tariffs feels fundamentally different from crashes past, as if the deep-seated rules underlying the usual chaos of buying and selling no longer apply now that a single man has managed to instigate a financial crisis on an inane whim. “It’s like, if we’re going out and I cheat on you, we may get back together, but are you ever gonna really trust me again? Fuck no,” Tuchman said. “Absolutely not, because it’ll always be that voice in the back of your head, what they’re capable of. Now we know what he’s capable of.”
As Tuchman and his fellow traders were waiting with a mix of dread and anticipation for the next headline or Truth Social post to drop, some had already declared the end of an era. Tom Lee, an investor who runs a firm called Fundstrat that distributes market analyses to more than 10,000 clients and manages $900 million, is known on Wall Street for his evangelical enthusiasm that stocks would rise ever upward in the long term. But in a note to his clients, he admitted his zeal might have been misplaced. Trump, he said, had committed “a fundamental breach of capitalism’s regulatory covenant.” It’s one that could reverberate with unpredictable consequences for a long time to come, even if the tariffs are eventually repealed and their champion replaced. Or as Spencer Hakimian, who manages a $78 million hedge fund called Tolou Capital, told me, “I did not think for one second he was going to go this crazy.”
Earlier that morning on April 9, as the market opened, Trump wrote on Truth Social, “BE COOL!” And soon after: “THIS IS A GREAT TIME TO BUY!!!” Almost no one was listening, a testament to Wall Street’s disillusionment with a president who only a week earlier had seemed, for all his foibles, to be their guy.
On April 2, shortly after the market closed, Trump appeared in the Rose Garden declaring that this would be remembered as “the day that we began to make America wealthy again. We’re going to make it wealthy. Good and wealthy.” Trump had already walloped markets with earlier tariffs against Mexico, Canada, and China, together the largest trading partners of the U.S. But at first glance, the 10 percent universal tariffs the president announced, plus reciprocal tariffs supposedly set at half of what other countries charge the U.S., seemed much better than investors had been expecting. James van Geelen, the founder of Citrini Research in Greenwich, Connecticut, watched the futures market initially jump on the news as his Bloomberg terminal’s instant messenger erupted. “You start getting inbounds, like, ‘We’re so back,’” he said.
While the rest of the country — or liberal America, anyway — had spent the first months of the Trump administration up in arms about its assaults on the courts and the universities and the federal government, Wall Street had remained relatively quiet. Even as the market began selling off in late February while Trump’s tariff threats intensified, the billionaire class that had endorsed him largely took it in stride. At this moment in early April, it was reasonable to suspect that maybe Wall Street knew something the rest of America didn’t, namely that Trump could run the economy well enough to satisfy both middle-class workers and private-equity executives alike. Maybe even those who didn’t vote for him would at least get a little bit richer as a consolation prize.
Then Trump brought out what is now known simply, devastatingly, as the Chart. Trump held the blue, white, and yellow poster board in his hands and went down the list of “Reciprocal Tariffs”: China was on top, with a levy of 34 percent added to his previous tariffs on the country, for a total of 54 percent; Vietnam, a major producer of textiles, was a couple of rungs down, slapped with a rate of 46 percent; Saint Pierre and Miquelon, a tiny archipelago off the coast of Canada, was hit with a 50 percent tariff; and on it went, with seemingly no country spared except a few outliers like Russia.
The math made no sense. Never mind that the White House thinks a trade deficit with another country means the U.S. is somehow being ripped off (that’s not how it works). The botched formula it applied resulted in tariffs that were as much as four times larger than they should have been, according to the economist whose work the White House claimed to be using. “There’s a good chance that the formula for calculating these percentages actually came from ChatGPT,” said Carson Block, the CEO of Muddy Waters Capital who is famous for his short reports on companies he believes are engaging in fraud. Tuchman compared the equation to “three apples, four oranges, plus two cashews, multiplied by seven, divided by two.”
Van Geelen, who started his career as a paramedic in Los Angeles, likened the situation to a medical emergency for which he had not been trained, feeling frozen and unable to help. “We have no clue what it looks like when you go from globalization back to protectionism. There’s no historical analog for that,” he said. “So you get, like, two hours of sleep and then you wake up again and you see how it’s going in Asia and you’re trying to find out where you can hide.”
There were very few places to hide when the market opened on Thursday, April 3. Almost everything was in free fall except for a couple of grocery-store stocks and shares of Philip Morris, as investors judged that if there were ever a time for a smoke, a recession manufactured by a president’s tariff fetish would be it. “Either he’s a malevolent guy and he’s got a mysterious evil, dark plan to hurt America or he is Forrest Gump that married Jacob Marley and gave birth to Donald Trump,” said Scaramucci, who runs SkyBridge Capital, a fund of hedge funds. “I’m sorry, you’re catching me on a day where I’ve lost, like, 15 percent of my money, so I’m a little fired up.” Hedge-fund billionaires who had supported Trump were contorting themselves to defend the policy, with Bill Ackman posting on X, “Sometimes the best strategy in a negotiation is convincing the other side that you are crazy.” It wasn’t exactly a compliment.
Traders across the political spectrum were grappling with how Trump, who seemed to judge presidential legacies by how much stocks went up, could allow this to happen. “I’m pretty clearly not a Trump supporter, and I’m also not a Democrat,” said Hakimian of Tolou Capital. “But my expectation was that this guy cares way too much about the stock market; he doesn’t really mean any of this.” Hakimian had spent the evening of Liberation Day with other finance bros at a bar on the Upper East Side. “And I noticed a very, very noticeable shift,” he said. “I have a lot of friends that really, really like this guy. But that person that was only tolerating it for his wallet, that guy is right now done. He doesn’t want to hear it from Trump.”
“Of all the things he has done that you might think, Okay, that’s got to be the last straw, and, People are going to wake up and be like, ‘Oh, that’s not what I wanted’ or ‘That’s not what I voted for,’ I certainly didn’t think it would be this,” said a macro-hedge-fund manager. “Maybe if there were a stock market for civil liberties, people would care. Like, that market would have been tanked, you know?”
By the end of Thursday, the S&P 500 had fallen about 5 percent. Trump appeared unbothered. “I think it’s going very well — The MARKETS are going to BOOM,” the president wrote on Truth Social shortly before the market closed its worst day since the pandemic. Then he flew down to Florida to kick off a golf tournament at one of his family’s resorts.
On Friday, April 4, investors started indiscriminately dumping investments. Even assets that had seemed relatively safe the day before no longer were. Selling had accounted for 88 percent of trading on Thursday — what’s known as down volume — and on Friday, it was 93 percent, a sign that sellers were having trouble finding willing buyers. “Friday was even a more completely total nowhere-to-hide sell reaction,” said Tim Anderson, an execution trader on the floor of the NYSE who supports Trump. Van Geelen, who had earned his reputation for prescient calls including shorting Silicon Valley Bank months before its collapse, was going sector by sector trying to find pockets of strength. One investor reached out to him, saying, “I’m paralyzed — what’s working?” He responded that there were few options: “I’m like, long VIX, short everything else, and crying. Those are the three things that are working.”
Andrew Left of Citron Research, a well-known short-seller, was questioning his support for Trump. “I hope they know what they’re doing,” said Left. “Don’t you think before they made this decision there was a lot of thought put into it? I would hope so. If not, it’s just fucking scary. It’s not like my mother balancing a checkbook. You would like to think there’s a strategy, no?” He had decided to bet on this belief by shorting the volatility index. He added, “Yeah it sucks, I’m actually getting killed today; today is my worst day in the market in years. But what am I going to do? Nobody votes for losing money.”
There seemed to be a good case for just shorting the hell out of everything. Block, of Muddy Waters, had recently taken a meaningful chunk of his personal capital and gone long on momentum stocks, those that are expected to go up because they have lately been going up. “But this week, I keep being reminded of the movie Airplane when Lloyd Bridge’s character just keeps going around saying, ‘Looks like I picked the wrong week to quit sniffing glue!’” he told me that morning.
Still, none of the hedge-funders I talked to were willing to short the whole market, afraid of getting caught with their pants down when Trump inevitably changes his mind. “The issue is, right now, you’ve got to be a Trumpologist. And I don’t know anybody who has edge there,” said Block. “Trump, at best, is a coin flip. But I don’t even think you can create a situation where there’s just a binary question, Will he do X or Y? Because quite often it’s like Z! And you never even thought of Z.” As we were speaking, Block got a call that Trump had just posted on Truth Social about negotiating with Vietnam, and Nike stock immediately spiked, forcing him to partially reverse course on a hedge he had put in place just hours earlier. “I never used to get those fucking phone calls,” Block said. “I didn’t have, like, two and a half seconds to make a decision like that before.”
Matters were made worse by the fact that no cavalry was coming. Jerome Powell, chair of the Federal Reserve, gave less than reassuring comments at a conference that afternoon. Powell had spent years trying to bring down inflation by hiking interest rates without causing a recession, and he gently explained that tariffs were only going to make that job harder. The Fed’s tightrope act had just gotten narrower: It had little room to bring rates down further when tariffs were likely to make inflation worse by pushing up prices. Taresh Batra, the vice-president of finance and investments for wealth-management start-up Range, who was visiting Utah, had awoken at 3:30 a.m. to watch the market and was growing distraught. “You’re waiting for somebody to say ‘I’ve got your back,’ and it doesn’t come at all,” he said.
The panic had spread well beyond Wall Street with normies clocking that this was a singular rout. “I have three daughters and I’m an annoying finance dad, so the market goes down, they call me and yell at me like I’m the market,” said Steve Quirk, the chief brokerage officer at Robinhood, who was trying to make sure the online stock platform could keep up with trading volumes that were setting records across the industry. Cem Karsan, whose firm Kai Volatility helps investors trade roller-coaster moves in the market, could feel his internal panic meter surging. “When my dad calls me and tells me he wants to sell stock, that’s a pretty good sign,” he said.
Trump was still pretending everything was fine. “MY POLICIES WILL NEVER CHANGE,” he wrote on Truth Social that morning. He added, “THIS IS A GREAT TIME TO GET RICH.” But most investors were getting poorer. JPMorgan increased its odds that the U.S. would slide into recession this year to 60 percent. Many traders were going to cash, afraid to hold positions while the market was closed for two days — an eternity in the quick-fire timeline of Trump policymaking. By the end of the day, the S&P 500 had fallen 6 percent. “Going into a weekend, it was kind of the perfect storm,” Karsan said.
The weekends are normally a quiet time of peaceful reflection for Fundstrat’s Tom Lee, whose faith in the market may be matched only by his faith in Jesus Christ. But investors were hitting him up by email, text, and Bloomberg chat. On Sunday morning, April 6, Lee and his wife went to two church services, but his mind was elsewhere. “During that sermon, I had like 15 emails to get back to. People were in sheer panic,” he said. He was one of the few investors who had still been optimistic about the market and was taking fire on social media from people questioning his stance; to be bullish in this particular moment, it seemed, was suddenly very political, as if you were endorsing Trump’s madness. Churchgoers with money in the market were approaching him with condolences, if not quite prayers: “They’re like, ‘Tom, is everything gonna be okay?’”
The “Sunday scaries” started to set in, said van Geelen, as even those who had remained most sanguine throughout the tariff crisis started to lose their cool. Dan Loeb, the billionaire Third Point hedge-fund manager who had until recently stuck by Trump, acknowledged that his thinking a couple of months earlier had been “too much 2nd order and not enough 3rd order,” he wrote on X. “Facts change and I change with them. I’m not political when it comes to markets.” Ackman went on X around 5 p.m. to ring the alarm: “We are heading for a self-induced, economic nuclear winter, and we should start hunkering down.” Less than 30 minutes later, CNBC’s Jim Cramer chimed in from his account, invoking the 1987 crash when stocks fell 23 percent in a single day: “How low can it go? Is another Black Monday beckoning?”
Over in Chicago, Karsan and his team were heading to the office so they could be at their Bloomberg terminals when the futures markets opened that evening, preparing for a historic night of swings. “As a volatility manager, this is when you make your name and you have your best periods of your career — like years can go by without these ever coming in on a Sunday night.”
Stock futures opened that evening down sharply while Asian markets cratered. It was shaping up to be a brutal Monday in the market with the possibility that rarely used circuit breakers would kick in to temporarily halt or even end trading to prevent a total collapse. At his terminal a block from Central Park, Hakimian saw something that seemed impossible: Gold futures, which normally rise in bearish markets as investors flee to safety, were falling, as were dollars — a strange alignment of assets that normally trade in opposite directions. “Gold is priced against dollars, so that inherently cannot be. It never happens,” Hakimian said. Yet he saw it with his own eyes.
Whether they had been summoned urgently back to the office or not, everyone with access to a Bloomberg terminal was online, the green dots lighting up next to their names in the instant-messenger window like a high-school gossip session in the days of AIM, waiting for any hint from the White House that there was a plan to stanch the bleeding. Instead, Trump gave them something tough to swallow. “I don’t want anything to go down, but sometimes you have to take medicine to fix something,” he told reporters aboard Air Force One that evening. “And you’re like, Oh God, we’re really, really screwed here,” said van Geelen.
Lee was now having misgivings about his bullish position, which was based on the belief that the whole tariff situation would blow over and stocks would go back up. “Sunday night, White Lotus had the finale, but I wasn’t watching that because I was actually on the phone with people till 2 a.m. and we were watching the Asian markets overnight,” he said. “So I felt the need to apologize. I had to basically question my own framework. And say, You know what? Something’s really broken here. This is really kind of attacking the nature of capitalism.” That night, he sent the note to his clients telling them his faith in the market had been betrayed.
On Monday morning, April 7, the VIX hit 60, its highest level since the COVID market crash. Citron Research’s Andrew Left was cursing himself: still short on the VIX, figuring the market would realize it was overreacting. “This is not COVID, like, Oh my God, are we all going to die? ” he said. “This is not 2008, Are all the banks going out of business? I was most confident the president would eventually intervene. You know, he’s a New Yorker. Too many Wall Streeters in his brain.”
This sort of mind-set explains why, later that morning, so many investors fell for a rumor that was, in essence, wishful thinking. Shortly after 10 a.m., an X account known as Walter Bloomberg, which reposts financially relevant news alerts in all-caps, trumpeted: “TRUMP IS CONSIDERING A 90-DAY PAUSE IN TARIFFS FOR ALL COUNTRIES EXCEPT CHINA.”
Markets surged on a wave of euphoria. “Lets make everything green again!” one investor exclaimed in a Bloomberg instant message. But the rally was over less than 30 minutes later, after Trump aides quickly called it “fake news.” The account had apparently reposted an exaggeration of a Trump official’s comments on television, so the market swooned again, its third down day in a row. Hakimian watched from the sidelines. The VIX remained above 50, which Tolou Capital views as a danger sign. “We have a rigid rule that we do not trade,” he said. “The signals are just so misleading. And within three minutes, you’re down 2 percent.”
Hakimian started noticing more disturbing movements in the market. Dollars were still falling, and now so too was the Treasury market — the bedrock of the global financial system. “That never happens. That’s like a Third World–country type of thing to happen,” said Hakimian. The pattern spoke to what the rest of the world thought of bonds backed by the U.S. government, and it wasn’t good: “That means that even though you’re offering more yield, more income, more return on your risk-free assets, no one wants them.” Wall Street had a nickname for the trend: “Sell America.” “I started kind of freaking out a little bit because I’m like, Oh boy, now you’ve got stocks going lower and yields going higher, and I was like, If the administration is okay with this, then I’m losing the script a bit,” said Batra. “I’m sitting there being like, Jesus, can the market close already? ”
On Tuesday, April 8, the market briefly attempted a modest rebound, but while it was technically functioning, the plumbing underneath was caving from the pressure. “You start seeing stuff where well-established correlations are breaking down,” said van Geelen. “You kind of get this fear of, Oh, this could be bad, and that’s just like a self-fulfilling prophecy.”
No one knew what to do. “I was frozen staring at the charts,” one investor typed on Bloomberg chat. “The abyss, staring into the abyss,” wrote another.
The day I visited the NYSE, Wednesday, April 9, started off the same. As bonds continued to sell off Tuesday, the yield on the ten-year Treasury note had climbed to 4.5 percent from 4 percent the previous week, reinforcing the feeling that investors were now in an alternate reality where the U.S. is not a safe place to invest anymore. Normally, the space between the asking price for a stock and its bid (the bid-ask spread) is only about a penny, but the gap was widening as if there were a glitch in the system, indicating weak demand. “It was peak fear, like we don’t understand markets anymore,” said a former trader who now advises investors.
Van Geelen had just landed in Hong Kong when the Treasury sell-off really began to spook investors. If we were heading for a recession, which everyone expected, then investors should be buying bonds, not dumping them. “That is, like, broken,” he said. He figured it was now or never for the White House to finally step in. “I do have a framework for what happens when things break. You kind of figure that’s when the government is going to do something. I was just like, Listen, either it happens now or it doesn’t happen at all.” He decided to go long, scooping up options on the S&P 500, before falling asleep around 1 a.m. local time. Two hours later, his phone started buzzing like crazy: Trump had paused most of the tariffs for 90 days and the market was spiking.
On the floor of the NYSE, the pause seemed to literally come from nowhere. Some of the traders were quietly walking hamburgers and hot dogs on paper plates back to their desks when a subtle change took hold. “All right, the ten-year!” erupted from a booth in the center of the floor. “Treasuries are rocking!” someone else sang. “We’re ripping!”
Being at the stock exchange when news is happening feels a little like being a mouse stuck inside the machine: The wheels start turning, the boards start flickering, electronics start beeping, people start yelling before you know what’s happening outside. And so we heard the whoops and cheers before we even saw the screens. “You never know, but you can hear it, that’s what happened — yeah, market just friggin’ spiked,” said Tuchman. Floor traders were emerging from their booths, people were smiling. Then Trump’s Truth Social announcement appeared on CNBC. By the end of the day, the S&P 500 would climb 9.5 percent, its best day since 2008 and third best since World War II.
As Tuchman walked back to his booth from the balcony, other traders ribbed him, making the journey feel somewhere between a victory lap and a walk of shame. “You missed the whole thing!” said one. “Did you just come from the White House?” joked another.
“That was spectacular!” Tuchman exclaimed, to no one in particular.
But Van Geelen was hardly celebrating. He closed his position by the end of the session, locking in an extraordinary single-day profit. This wasn’t a market he understood well enough to hang out in. “It’s a generational inflection point contingent on one dude,” he said.
Even Lee said the uncertainty was too much. “There’s this adage on Wall Street, which is ‘Bottoms are made on bad news,’” he said. He couldn’t escape the feeling that some sacred code had been violated. The government intersects with the market in all kinds of ways but primarily as the stable ground upon which the market rests. Now it was clear that the ground was an illusion, just as it was clear that the U.S. could, with the announcement of a single bad policy, become a pariah state with no respect for the rules. The tariff catastrophe could henceforth put a risk premium on American assets and a ceiling on stock — the type of thing that happens in countries where governments can seize private property and businesses at will.
Whether this would be a Trump discount or a permanent one remains to be seen. “The U.S. is the prime example of capitalism at its best. And so it’s not a fact that that’s already been ruined, but there’s a risk that it’s going to get ruined,” said Lee.
“I submit that irreparable damage has been done to the United States,” said Scaramucci. “If you’re a western ally, you’re looking at the United States and saying the body politic is damaged” — in other words, that American voters can’t be trusted to elect a president who can act rationally. In this view, we could look back on this crisis as the moment when the U.S. lost its place as the guarantor of the global economy, with all the wild advantages that position provides, as investors turn to comparatively reasonable and predictable stewards — say, China. Amias Gerety, a partner at venture-capital firm QED who previously served in the Obama administration helping to oversee financial stability, said the crisis could create dangerous alliances between foreign powers. “We always started with the question, How do we stabilize and restore confidence?” he said. “Not, How do we increase uncertainty and destroy confidence?”
The day after the pause, April 10, the market went down again, wiping out more than a third of the previous day’s gains. The tariffs, investors realized, had not been canceled but only delayed for three months, which was a lot of time for Trump to change his mind again or slap new draconian taxes on countries and businesses. Indeed, overnight, Trump had hit China with a new 125 percent tariff rate as the two super-powers began a tit-for-tat escalation. “We are in a financial war now, like it or not,” one investor wrote on Bloomberg chat.
The ripple effects for the broader economy were starting to become clear. Van Geelen spoke with one Amazon wholesaler whose order, placed prior to Liberation Day, was still in transit. Getting the goods off the ship was going to cost him $5 million, more than he could sell them for. Rather than take a loss, he was leaning toward abandoning the shipment and declaring bankruptcy. “I’m not selling shelter, I’m not selling food, I’m not selling water,” he told van Geelen. “Nobody’s going to pay double the price for this stuff.”
Late on the evening of Friday, April 11, U.S. Customs and Border Protection announced a tariff exception that became known as the “Apple carve-out,” exempting smartphones, laptops, computer chips, and other electronics from reciprocal tariffs. “Boom,” Left texted me on Saturday, April 12. “Computers phones semiconductors are only thing that counts in this world.” But then Sunday, Trump declared there would actually be no exemptions, just separate chip tariffs coming soon. Apple stock soared 7 percent when the market opened on Monday, April 14, lifting the S&P 500 along with it, but just like previous respites from the tariff turmoil, it didn’t last. That afternoon, Trump threatened more tariffs on pharmaceuticals. On Tuesday, April 15, the White House put out a fact sheet explaining that China actually “faces up to a 245% tariff,” a figure absurd in its enormity.
The following day, Powell delivered his strongest warning yet about the tariffs, saying the economic effects were likely to be “significantly larger than anticipated.” Trump woke up livid on Thursday, April 17. He ranted on Truth Social, “Powell’s termination cannot come fast enough!” It was the kind of rhetoric that even Trump’s base on Wall Street finds distasteful. “I’m not a fan of his badgering the Fed. I just don’t think it’s a good look,” said Anderson, the NYSE execution trader, though he later added he wouldn’t mind if Trump did fire Powell. “I almost think you make the Fed less likely to act through badgering them.”
By the end of the day on April 17, before the stock market took a long weekend ahead of Easter, the S&P 500 was down 7 percent since Liberation Day. But it had fallen nearly 14 percent since its highs a few weeks into Trump’s second term, when deregulation and tax cuts still seemed like the flagship elements of his economic platform and when America’s role in the world was a clear and knowable thing.
