While this is not a pattern anyone hopes to get used to, the fact is that markets are getting much more resilient to shock events. A combination of experience and steady improvements in technology is helping institutional financial markets weather the storms far more efficiently than ever before, and over the long-term, the lessons learned in these periods will help drive new growth.

Some evidence of this trend is beginning to emerge in the first quarter earnings of the world’s largest banks, which produced the highest combined quarterly revenues from trading in more than 12 years as volumes spiked in response to the conflict in Iran. We’ve also seen it in our electronic trading volumes at Tradeweb, where March 2026 set a record with total trading volumes of $87trn (£64.6trn). Beneath those headline numbers, however, we have seen some significant changes in the behavior of institutional market participants during turbulent markets that illustrate a major shift in the status quo. The forces of nature in financial markets are evolving in some important ways in response to repeated market shocks.

A more efficient cross-market response

The widespread growth of electronic trading across all major asset classes has been a fundamental driver of the market’s ability to respond to these types of systemic volatility events. Unlike previous periods of market turbulence, when volatility was concentrated in a handful of asset classes, the response to the conflict in Iran was broad-based, affecting government bonds, interest rate swaps, credit derivatives, mortgages, credit and ETF markets. As an example, total swaps volume on Tradeweb rose 88.6% year-over-year in March 2026, credit derivatives volumes increased by 64.7% and ETF volumes rose 46.9%.

Together, this surge in electronic trading activity across asset classes resulted in a record $3.8trn in average daily volume (ADV), more than double the $1.8trn ADV executed across our platforms in March 2024. Trading volumes do not tell the whole story, however. What’s been truly remarkable about the market’s response to the conflict in Iran is that we have not seen many of the significant dislocations that have occurred in other crises.

The behavior of the interest rate swaps market during March of 2026 was a perfect example. Some of the sharpest swings in volatility following the start of the Iran conflict occurred in the UK Sterling-denominated swaps, where implied volatility moved by as much as 255% in intraday trading. However, bid-offer spreads only widened by about 75% on Tradeweb during that same period, illustrating how the efficiency of our electronic market absorbed the volatility of the shock rather than passing it through to buy-side clients.

We saw similar behavior in Euro- and USD-denominated swaps, where dealer quotes continued to hold steady and clients were able to efficiently transfer risk. For instance, three-quarters of all Euro and nine out of ten of all USD swap inquiries received executable prices during the month.

Even in emerging markets (EM) swaps across Asia, Central and Eastern Europe and South America, which tend to be more volatile, liquidity metrics continued to support resilient electronic markets. This was reflected not just in trading activity, which climbed almost 102% year-over-year in gross DV01 terms, but also in client participation, with the number of clients completing transactions on our EM swaps increasing by nearly 28%.

For those of us who’ve been around long enough to remember what used to happen during periods of surging volatility, such as the 2020 pandemic, these numbers are staggering.

While market participants still have the option to trade manually, what the current trend tells us is that the electronification of financial markets is creating a resilience-driven virtuous loop, where the abundance of data and strategic investment in pricing technologies reinforce market stability and efficiency.

More ways to access liquidity

A similar trend was on display in client use of automated trading and execution across multiple different trading protocols to address real-time swings in market sentiment. Notably, rules-based automated trading via Tradeweb’s Automated Intelligent Execution (AiEX) solution during March of 2026 was up 21.9% year-over-year. In fact, 44.6% of all tickets traded on our institutional platform in the first quarter of 2026 were executed via AiEX, up from 30.7% in Q1 2022.

There was a time not long ago when the idea of automating trades during a market shock event would seem preposterous. Today, the majority of trades are executed this way. Part of that is due to overall increased comfort levels and direct integration of electronic trading into modern financial markets workflows. But, it’s also being driven by improvements in technology that make it possible to incorporate real-time market data and previous trading history into an automated trading strategy, giving traders the ability to keep large volumes of trades moving as they respond dynamically to market moves.

Likewise, market participants have been using a wider range of trading protocols than ever to access liquidity. In March, we saw record volumes processed through our Portfolio Trading, Request for Quote (RFQ) and All-to-All protocols across highly liquid markets like rates and ETFs, as well as less-liquid markets like credit and derivatives.

Innovation breeds adaptation

Ultimately, the trends that have been unfolding over the past six years show what happens when a historic run of volatility collides head-on with a golden age of technological innovation. Markets have quite simply gotten smarter thanks to continued investments in technology, and the steady flow of volatility in recent years has helped market participants refine those tools and sharpen their workflows to adapt more quickly than ever before possible.

The proof is in the performance. Amid record volatility and record trading volumes, markets continued to function efficiently. Swap spreads held strong, liquidity kept flowing and investors continued to find opportunities in an exceedingly challenging macroeconomic environment.