It took just one word.
“Pause.”
Not “rescind,” not “repeal,” not “reverse.” Just a fleeting, monosyllabic lull in the trade war symphony—and yet the markets responded like Pavlov’s dogs at a dinner bell. On April 9th, 2025, President Trump uttered the magic word, and with that, the Nasdaq 100—via QQQ—rallied 12% in a single trading session. The third-best day in its history. Behind only the days surrounding 9/11 and the collapse of Lehman Brothers. We are, apparently, in historic company.
Call it what you will—“jawboning,” “verbal QE,” or the “Trump Put 2.0”—but make no mistake: this was a market event of biblical proportions. Or as Bloomberg ETF analyst Eric Balchunas1 puts it: “The algos, which were lying in wait, like salivating dogs, were thrown big chunk of red meat”.
The Market as a Mood Ring
In a post-algorithmic, Fed-puppet, presidency-as-central-bank financial system, the market no longer waits for fundamentals. It craves dopamine hits. And April 9 delivered a triple shot of pure adrenaline.
“QQQ went up 12% today,” Balchunas says [about April 9], sounding more stunned than triumphant. “That’s the third best day ever… up there with those crazy times. You know, 2001, 2008—and now”.
Forget PE ratios. Forget earnings. Forget geopolitical risk. The president opened his mouth, and trillions moved. In the shadow of this manipulated rally, Balchunas offers a darkly comic observation: “Market timing is so hard, especially in a world where the Fed or the president can control the market with, like, one word”.
Welcome to asset price sorcery, where equity rallies are triggered not by profit, productivity, or progress—but by press conferences.
Degens vs. Vanguardians: Who Wins?
While the institutions dithered, two groups held the line: the Vanguard faithful and the degens (slang: individuals who engage in high-risk, speculative, and often unconventional trading or investment strategies). “The Vanguardians, they always buy the market,” Balchunas notes. “But the dejens, they were really hanging tough… They were just throwing money into [SOXL]… and honestly, they’re looking good today. It went up over 50% in one day. Fifty-five percent. Right? This is the best return it’s ever had”.
Let that sink in. A 3x leveraged semiconductor ETF, up 55% in one day. These are not normal times.
And don’t expect the degens to retreat. As Balchunas quips, “They’re never NOT gonna buy the dip anymore.”
Meanwhile, the bond market tried to issue a distress call. The CLO ETF “JAAA” briefly traded at a 1% discount—a microscopic blip, but a signal nonetheless. “It was the first sign that there was maybe some illiquidity forming in bonds,” says Balchunas. “Some people even said the bond market was what pushed Trump to change. I don’t know if that’s true or not, but the bond market was starting to show signs of illiquidity”.
Trump reportedly confirmed the influence. Let that be your canary in the coal mine: not fundamentals, not geopolitics, but ETF pricing quirks.
Volume: The Freakout Index
Want to know how scared the market was? Check the volume. SPY—the S&P 500 ETF—traded $127 billion on Monday, the largest single-day volume in history.
Balchunas’ team calls this “the freakout zone.” The average SPY volume? $25 billion. Anything over $60 billion? Red alert. “When people are adjusting [their portfolios], the volume goes up,” he explains. “It is, in a way, an explosion of negativity”.
And yet—ironically—these panics often precede rebounds. Balchunas’ colleague Athanasios Serafegas ran the numbers: “In the next month [after these freakouts], there’s a two-thirds chance that the market will be positive… The median return was about 1.2%”.
Small comfort, perhaps, when the volatility is weaponized policy.
Active Management: Still Dead
The post-rally fallout spells another headache for active managers, especially those who tilted defensively.
Before the Trump pause, over half of active equity managers were beating the index—tilted toward value, light on Magnificent Seven exposure. “But this rebound, how will this affect that?” Balchunas asks. “It’s really hard right now to be an active manager, especially on the macro side because these macro winds can just decimate anything you had going”.
For bond managers benchmarked to the AGG—heavy on treasuries—the picture was worse. “A lot of them… take extra risk. So when there’s a huge sell off in bonds, they get caught a little naked”.
No hedge can save you when the market is governed by tweets and tariff toggles.
China, EM, and a New Cold War Allocation
The China trade lives—and dies—by state sponsorship. As Balchunas notes, “China’s national team went in and bought equity ETFs and helped prop the market up”. Almost like they knew the Trump pause was coming. Perhaps they did. If the Fed can jawbone junk bonds, why can’t Beijing do the same for FXI?
But the longer-term outlook for EM ex-China is murkier. “FXI [China] only down 2%. EMXC [Emerging Markets ex-China] down 9%,” he notes. “But this may reverse a little… If China is sort of put into a special place and trade is full of friction with the U.S., it’s possible that goes the other way”.
Still, U.S. investors are a loyal bunch. “They have a hard time buying European stocks. They have a hard time buying China… They’d rather have their money put to work here”.
And why not? The president just reminded everyone: the “Fed Put” may be gone, but the “Trump Put” is alive and well.
Conclusion: One Word to Rule Them All
This isn’t just about ETFs, tariffs, or even Trump. It’s about the metaphysical state of the market. We no longer live in a world governed by economic reality—but by narrative volatility. By verbal volatility. By the click of a microphone.
When Trump paused the tariffs, “he played the role of the Fed,” says Balchunas.
He didn’t just pause a trade war.
He rewrote the rules of market gravity—with a single syllable.
Source:
1 Weber, Joel and Eric Balchunas. "Podcast: Could This Be the Return of the ‘Trump Put’?" Bloomberg, 10 Apr. 2025, www.bloomberg.com/news/articles/2025-04-10/podcast-could-this-be-the-return-of-the-trump-put.
