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Temps de lecture: 4 min
ETF Global Capital Markets Specialist
ETF Capital Markets Specialist

Tantrum, what tantrum? How ETFs performed during Liberation Day turmoil

Financial markets oscillated wildly following President Trump’s announcement of Liberation Day tariffs on April 2. Fear of global tariffs led to panic selling and knocked $3T USD off the value of global equities. When the president announced a 90-day pause in the implementation of tariffs, markets rallied, accompanied by record trading volumes in US equities.

Dramatic market dips have gone hand-in-hand with fears of illiquid, frozen markets since the Great Financial Crisis.  The lesson of the tariff turbulence has been the reverse: ETFs demonstrated their utility as price discovery and liquidity vehicles across both equity and fixed income markets.

Smooth ETF trading as volumes surged

Trading volumes in global equities and ETFs set all-time records in April 2025, slightly higher than other recent market shocks such as Volmageddon in 2018, COVID in 2020, and Russia’s invasion of Ukraine in 2022.1

Trading volumes in US-listed ETFs increased by 70% during the month of April, trading $5.4T USD compared to its historical average of $3.2T. ETF trading accounted for 35% of all US equity market volume, above its historical average of 23%, illustrating that investors continue to gravitate toward ETFs in times of stress.

 

State Street Global Advisors (now State Street Investment Management) accounted for 12% of US equity market volume and 35% of US-listed ETF volume. On April 7, S&P 500 ETFs experienced a single-day record of ~$160B USD in trading volume. SPDR ETFs accounted for 85% of this.

Only 26% of trading volume in UCITS occurs on exchange in EMEA, so trading volume does not reflect the complete picture.

In the APAC region, total trading volumes in all ETFs listed in Hong Kong, Singapore, Japan, and Australia increased by 10% in April compared to March. For the same period, volumes in SPDR ETFs listed in those markets increased 54%.

ETF bid/ask spreads performance

Bid-ask spreads widened across global and UCITS ETFs, reflecting lower liquidity and falling underlying securities.

Spreads across all US-listed ETFs averaged 0.66% between April 3 and April 11 compared with their Q1 2025 average of 0.34%. For the same period, SPDR US-listed ETF spreads averaged 0.30% vs. their Q1 2025 average of 0.16%, leading the way in categories such as S&P 500, select sectors, commodities, high yield bonds, and bank loans.

Europe’s ETF trading ecosystem has a more fragmented market structure compared to the US, so on-screen market quality can be a misleading metric. But spreads in UCITS equity ETFs widened from an average of 0.37% to 0.85%, while SPDR UCITS equity ETF spreads increased from 0.18% to 0.42%.2  

 

In APAC, average equity spreads across ETFs listed in Hong Kong, Singapore, Japan, and Australia averaged 0.58% between April 3 and 11 vs. their Q1 2025 average of 0.38%. Over the same period, the average spreads in SPDR ETFs listed in these countries widened to 0.28% from the Q1 average of 0.20%.

One would expect spreads to widen during unexpected, risk-off events like Liberation Day’s tough tariff stance. But SPDR spreads remained well within the normal range, signifying comfortable levels of liquidity.

ETFs have been a safe haven in market storms

ETFs have shown resilience in stressed markets, acting as a price discovery and liquidity vehicle for investors and traders when they need it most. Liquidity events like the recent tariff tantrum remind us that ETFs may serve as a cost-efficient vehicle for investors to access liquidity, even when markets are at their most fearful. 

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