Stock Markets in 2025: From Panic to Record Highs

But First, 2025 at tastytrade

What a year. From the strategies traders leaned on most, to the days the platform lit up, to the products and symbols that dominated the tape, we pulled together your official 2025 tastytrade Wrapped.

Stock Market Comeback

Wall Street overcame a rocky start to power sharply higher in 2025. The S&P 500 put up six consecutive months of gains from May to October. That marked the longest winning streak in four years. Starting from June, the benchmark index of US stocks set a new high every month until the rally finally paused for a breather in November.

Traders clearly took notice. It seems only right that four of the five top options strategies used on the tastytrade platform in 2025 had a bullish bias. Buying call options outright proved to be most popular approach, followed by selling vertical put spreads. Those traders sought to benefit from falling volatility and rising prices—both common features of a bull market—while firmly defining their risk exposure to prevent runaway losses in the event of an unexpected selloff.

Such caution seems prudent after the blistering selloff that struck markets soon after the start of the year.

Tariff Panic Swept the Markets in Early 2025

Stocks settled into an uneasy sideways range by mid-December 2024 and remained locked there through January 2025 as traders wrestled with what to make of the sweeping economic policy overhaul promised by the incoming Trump administration.

The standstill resolved into a withering downturn by the second half of February as surveys tracking US business confidence flashed bright red warning signs amid the rollout of new tariff barriers. Closely watched purchasing managers index (PMI) data from S&P Global proved to be especially unnerving, showing that corporate leaders expected the levies to severely hurt economic growth even as they drive up inflation.

In fact, the start of the downward break on February 21 ranks in the top ten most active trading days of the year. A vicious drop of close to 20% followed over the next six weeks, culminating in an explosive crescendo on April 4. That day, the S&P 500 lost an eyewatering 6%, marking the biggest one-day fall since mid-March 2020, when the outbreak of the COVID-19 pandemic still wreaked havoc on global financial markets. That was the most active trading day of 2025.

The slump came in the wake of so-called “Liberation Day” on April 2, when President Donald Trump unveiled a vast array of tariff hikes targeting nearly every US trading partner, with rates set on a per-country basis. Beyond upending trading norms that businesses have long relied upon, this set the stage for paralyzing uncertainty about what the new rules of the road will be as importers steeled themselves for protracted bilateral negotiations.

Traders’ initial reaction to the news on April 3—a loss of almost 5% for the S&P 500—also registered as one of the top ten most active days this year. It ranked eighth, after February 21 in seventh place.

AI Frenzy Burns Bright as Tech Stocks Dominate the Market

Appropriately enough, April 7 and April 9 likewise made the list. They mark the bottom of the selloff and the tectonic start of the rally that followed, respectively. The latter produced an earthshaking daily rise of 9.4% as President Trump announced a 90-day pause on his tariff plans. It was the largest such gain since the first day of the recovery from COVID-era lows more than five years earlier.

Unexpected twists and turns in US policy continued to torment traders. An October 10 drop of almost 3%—when President Trump threatened China with a tariff rate of 100%—is the second-most active day of the year. A seesaw swing of over 3.5% on November 20 comes in third. That day, traders erased an early rally after a solid earnings report from Nvidia (NVDA) amid worries about the Federal Reserve aborting rate cut plans. Still, April’s debacle marked a bottom.

The chipmaking giant—the largest listed US company by market capitalization—is a case in point. It’s set for another strong year after its shares jumped 171% in 2024 amid explosive growth in the artificial intelligence (AI) space. The stock rallied furiously from tariff panic lows, erasing a drop of over 36%, then setting a new peak some 56% higher.

In fact, all of the year’s most traded stocks came from the technology sector. Palantir (PLTR), AMD, and Strategy Inc (MSTR) round out the top ten alongside the so-called “magnificent seven” tech champions: Nvidia (NVDA), Tesla (TSLA), Apple (AAPL), META, Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL).