How the Russel 2000 Index Futures Reacted to Liberation Day (Trump Tarriff Announcements)

As a trader, investor or hedger, it is important to balance out technical considerations, fundamental considerations with prevailing market sentiment. In this blog post, we will take a closer look at how the June 2025 Russel 2000 index futures reacted to President Donald Trump’s tariff announcements. The M2KM25 (M is the code for June) June Russel 2000 contract opened at 2027.5 on 2nd of April 2025 closing at 2059.1 on the same day representing a gain of 1.6%. The next day was Liberation Day i.e. the day Trump announced his tariffs. He announced the tariffs after the bell on 2nd of April 2025. Now see what happens on liberation day. On 3rd of April 2025, the Micro E-Mini Russel 2000 index futures opened 91.2 points lower i.e. at 6.01pm ET 3rd April 2025; after opening lower, it continues to move lower in the trading session closing at 1923.8 (buyers only managed to push it up to a high of 1984.7 during the day). Now observe the chart below:

This chart shows significant sell-off “on” liberation day (Trump’s tariff announcement day). Fortunately, the market reacted in line with the prevailing technical environment i.e. the sell off ensured prices remained below 9x and 3x SMA. Traders and investors should not assume that prices will continue to go downwards just because moving averages have crossed in any direction. Instead, the should continue to monitor fundamental news (and the reaction of market participants to it). The very next day the M2K June contract opened about 2 points lower and continued to move lower signifying that the market (is still selling off the June M2K contract resulting in the continued decline of the index future value.

As a market participant, it is important to be vigilant and unassuming. This is because a technical set up can be easily scattered by a piece of fundamental news. For example, if on the evening of April 2nd (the day before Trump’s announcement), it was announced that Trump is cancelling the tariffs and would no longer be implementing them; the market may have reacted quite differently – for example the extent of the sell of and negative selling sentiment may have been less.

Also let us take a look at a higher time frame to see if we can predict the extent of this downward move.

I estimate that the Russel 2000 index future contract series June – December 2025 may sell off to 1706 – 1648 area before developing more bullish bias.