Market turbulence is a recurring theme in the financial world, and 2025 is already proving unusually volatile for both seasoned investors and newcomers alike. As the global landscape shifts, several underlying currents are creating ripples across equity, currency, and commodity markets, challenging traditional investment wisdom and prompting deeper analysis.

The combination of rising tariffs, persistent inflation, and continuing geopolitical tensions is at the forefront of market participants’ concerns. According to recent surveys of institutional traders, volatility has notably increased: more than 40% of professionals now cite market swings as their biggest daily challenge—a jump from the previous year. This heightened turbulence is not confined to one region or asset class. For example, abrupt announcements about tariffs or trade policies have led to dramatic moves in major currencies like the Mexican peso and Canadian dollar, each experiencing swings of more than 1.5% in a single session. These are rare, significant shifts for markets that usually trade with much less intraday fluctuation.

The underlying causes for this turbulence are complex. On one hand, markets are highly sensitive to headlines, especially those relating to trade policies and macroeconomic announcements. On the other, there is a growing realization that traditional diversification strategies may not be as effective when correlation between asset classes rises during periods of market stress. This is prompting investors to embrace new tools—such as electronic and algorithmic trading platforms—to rapidly adjust portfolios and manage risk, especially during periods when liquidity may be thin.

Yet, there are also opportunities embedded in this turbulence. Periods of heightened volatility can provide “saner entry points” for long-term investors who remain unfazed by short-term swings. In such an environment, maintaining discipline, focusing on fundamentals, and viewing downturns as opportunities rather than threats are key strategies.