Recent US tariff announcements have unsettled global markets, sparking concerns about rising import costs and inflationary pressures to US consumers, and the risk of a broader economic slowdown globally. To make matters even more confusing, the tariff announcements were followed by a rollercoaster ride of tariff threats, imposition, retaliation, escalation, and somehow, a pause.

The CBOE Volatility Index (VIX), which tracks market expectations of 30-day volatility, closed above 50 on 8 April. In the last two decades, there have been only two other periods when the index closed above 50, which were during the Global Financial Crisis (2008–2009), and the Covid-19 pandemic in 2020. 

All of this chaos can make you feel like you’re caught between Trump, China, tariff, volatility, and everything in between. But this isn’t the end of the day – read on to find what you can do.

Timeline of the tariff twists and turns

US President Donald Trump had been threatening tariffs since his election campaign last year, but at least for countries other than China, Mexico, and Canada, things were not set in stone until “Liberation Day” on 2 April. 

An executive order was signed at a Rose Garden address to impose a baseline 10% tariff on all US imports from 5 April, and additional reciprocal tariffs on selected countries from 9 April.

Days leading up to the imposition of reciprocal tariffs were as chaotic as they could be – hearsay that the order would be retracted, along with escalating tension, particularly between the world’s largest superpowers, China and US, sent markets into turmoil. 

The S&P 500 Index briefly entered bear market territory on 8 April, before unexpectedly making its third-largest daily gain since World War II on the very next day, after the reciprocal tariffs were reversed. 

To the disappointment of many investors though, the rally tapered off as quickly as it came on 10 April. And amidst all of these, a brief flight to safety for US government bonds – long considered a safe haven asset – was followed by a sell-off that is rarely seen during uncertain times.

As of 11 April, the sweeping baseline 10% tariffs remained in place, while the US and China are unbudging in an escalating tariff row.

Market volatility put into perspective

The back and forth of the policy, escalation from China and more, culminating in a pause all staged a dramatic reversal reflected in market returns in a matter of days. Living through a market turmoil and seeing gains become losses in real time as they unfold, we can easily call this a catastrophic period for investors. 

While all of this feels like a catastrophe now, you might be surprised to find that these fluctuations appear much less dramatic when we take a step back and adopt a broader view to look at the markets by years and decades, not mere days or weeks.

Large corrections brimming into bear market territory – although rare – are not unheard of. In the past 7 years or so (since 2018 to 9 April 2025), the S&P 500 Index has had only four instances of corrections exceeding 20%. 

Zooming out even further and looking at the S&P 500 since its inception in 1918 will tell us again that the overall trajectory of markets have trended upwards, and new highs are reset over time, only through episodes of “meltdowns", “corrections”, and “bloodbaths”.

To put this into another perspective, investing in the markets is like placing our bets, or even faith, in the ingenuity and tenacity of humankind. 

Innovations aim to create better products and ultimately improve the standard of living for mankind. These forces are the true secular trends that drive markets. The quantum of money and liquidity grow in tandem, which explains the reason behind why stock markets have beaten their highs over and over, and why they are likely to continue to do so in the long term. 

In this journey, volatility is a known feature in the market. Therefore, when investing, it should be a conscious choice as an investor to tolerate these ups and downs for a higher expected return in the longer term. 

When investors fled to safety – away from government bonds

Other than the rapid U-turns in the equity markets, investors around the world are also closely watching the volatility in US Treasuries, following the peculiar sell-off of US Treasuries after the 9 April announcement of US reciprocal tariffs. US Treasuries are typically seen as safe haven assets that garner higher demand during times of market woes. 

Market participants pointed to a host of reasons for the selldown, chief of which was the concerns about the implications of tariffs for the US economy and debt levels, as well as the general appetite domestically and abroad for dollar assets, among many other competing underlying factors that the markets are dealing with. 

With all the headlines talking about US Treasuries taking a hit, is there still value for investing in Treasuries? 

To answer this question, we need to look at not just Treasuries, but fixed income as a broader asset class. Bonds have typically been seen as a ballast in portfolios to balance equity risk because of their low correlations with equities. 

Even after experiencing their 'worst year' in 2022 due to surging inflation, slowing growth, and the geopolitical uncertainty brought forward by the Russian invasion of Ukraine, the bond market recovered by mid-2023. 

Diversification within the bond asset class portion can further mitigate concentration concerns. For investors, this can be easily achieved by investing in diversified, well-managed bond funds run by experienced fund managers who have navigated multiple market cycles successfully.

What’s ahead of us, and what can we do now?

Many have found themselves unnerved by recent events. With the unusual US Treasury sell-off and S&P 500 Index’s yo-yoing within a short period of time, concerns on losing our hard-earned money are legitimate. Here are some helpful pointers on what to bear in mind to make it through this period with our sanity intact.

1. Focus on what you can control

You might feel anxious to “do nothing” amidst the market turbulence, especially without a clear answer for where we are heading towards. This is why the herd effect becomes more pronounced in times of uncertainty, as we look to seek advice from news headlines and peers which generate a lot of noise. But as with many things in life, we should direct our attention towards those we have control over. Here’s a checklist of what these may be: 

• Set aside a comfortable level of liquidity through an emergency fund, which creates a safety net during downturns.
• Keep your emotions in check. Avoid making impulsive investment decisions based on short-term market fluctuations or based on what others are doing. 
• Stick to your long-term investment objective.

When you have your safety net ready and a portfolio designed to ride the tides to achieve your goals in the long term, it is wise to stay the course and take no action.

2. Back-burner those you can’t control 

What is equally important is to understand what we have no control over. Tariffs and retaliations, policies, and macroeconomic factors like interest rates, inflation, or currency movements are just some examples. While these elements are relevant and can influence the markets, they are beyond our influence. 

The recent back-and-forth tariff news – and the market volatilities that come with them – serve as important reminders that forecasting the future is frequently an exercise in futility. Emotion-driven decisions may be eventually reversed with sufficient time, but could leave a lasting dent for near-retirees or retirees who bit the bullet and realised losses. 

3. Time in the market matters more than timing the market

Staying invested matters more than timing the market. Attempting to predict short-term market movements can lead to missed opportunities. Historically, some of the strongest gains have followed periods of steep decline, and missing just a few days of rebound can significantly impact long-term returns.

This time is no exception. If you had panic-sold your equities before 9 April, you would have missed the next-day recovery across the three major US indices (9.5% for S&P 500, 7.9% for Dow Jones Industrial Average, and 12.2% for Nasdaq Composite). 

A prudent way of investing during times of increased volatility is a return to the discipline of the dollar cost-averaging — investing a fixed sum of money at regular intervals, regardless of the asset's current price. 

4. Review again: Are you overconcentrated?

A downtime like this offers a great opportunity for us to take a pause and inspect. If your portfolio has dealt a significant blow, look at the reasons behind it. Were you overly allocated to US stocks? Maybe it was due to the conviction you have built on US stocks based on its strong gains in the recent past? Recency bias and overconcentration often are common pitfalls among individual investors and can be rectified.

Diversifying across asset classes, geographies, and strategies can help cushion portfolios against shocks and smooth out returns. A well-diversified portfolio is better equipped to withstand market volatility, making it easier to stay invested during challenging markets. 

History lessons are inward-looking

As stewards of our own financial journeys, it is important that we go back to the roots of our investments to remind ourselves of our investment goals and decisions. Without which, we leave ourselves vulnerable to the herd effect, relying on crowd “wisdom” to decide what to do. 

Invest in time and consistent effort to understand the markets and your investments. The rewards of such diligence will become apparent during periods of market turbulence, and especially valued upon your retirement in the future.