EXCLUSIVE: The Real Reason EV And AI ETFs Are Whipsawing Has Nothing To Do With Tariffs

Renewed trade tensions and a fragile geopolitical backdrop are once again testing investor conviction in EV and AI-linked equities. Fresh tariff uncertainty tied to U.S. policy toward Europe has injected new volatility into markets, particularly for ETFs holding high-growth stocks that are already sensitive to macro shocks.

EV and AI names have swung sharply in recent sessions. After dipping sharply on Tuesday due to tariff jitters, Lucid Group Inc (NASDAQ:LCID) surged more than 18% on Wednesday, while AI-linked stock Nebius Group NV (NASDAQ:NBIS) is down around 9% this week after sharp price swings. Applied Digital Corp (NASDAQ:APLD), and IREN Ltd (NASDAQ:IREN) also dipped sharply on Tuesday, then pared some of the losses on Wednesday before dipping again on Thursday. Traders remain cautious as policy signals continue to shift and geopolitical risks linger.

Swings in AI and EV stocks reflected in AI and EV-themed ETFs as well, this week. The Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ), Roundhill Generative AI & Technology ETF (NYSE:CHAT), iShares Self-Driving EV and Tech ETF (NYSE:IDRV), and Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV) were on the parallel roller coaster, dipping and surging sharply.

A Cloudy Macro Picture Keeps Traders On Edge

According to Matt Markiewicz, head of Product & Capital Markets at Tradr ETFs, uncertainty itself has become a dominant market force.

"The macro picture is so cloudy," Markiewicz told Benzinga. "There is no way to really try to synchronize positioning with what is going on out there."

He noted that tariff headlines and geopolitical developments tend to produce rapid price dislocations, often overwhelming traditional fundamentals in the short term.

Volatility Has Been Building Since Last Year

Markiewicz said the current turbulence didn't emerge overnight. Signs of two-sided positioning began to appear as AI infrastructure stocks surged to record highs last year.

"If you look back to last October when AI infrastructure stocks were trading at all-time highs, you naturally saw short interest in these names begin to climb," he said, suggesting that investor conviction had already begun to fragment.

That divergence has since widened, with traders increasingly split between long-term believers and short-term skeptics.

What’s Driving Short-Term Moves?

While debates around the sustainability of AI spending and EV adoption continue, Markiewicz framed recent market action as more sentiment- and technically driven than fundamentally anchored.

"It's more of a technical and sentiment mix," he said, adding that concerns about the circular nature of the AI buildout have contributed to choppier trading patterns.

As a result, even positive news can struggle to produce sustained rallies in an environment dominated by macro uncertainty.

Where We Are In The Cycle

Tariffs are acting as the trigger, not the root cause behind the volatility, thinks Markiewicz, exposing where EV and AI stocks sit in their cycles, turning already-fragile sentiment into sharp, tradable volatility.

Many AI infrastructure and EV names are no longer early-cycle players and are in a phase where expectations are high and tolerance for macro risk is low. That's why tariff headlines cause outsized moves now versus a year ago.

With debatable fundamentals and uneven earnings, prices are being driven by positioning, momentum, and exhaustion signals. This environment is driving geopolitical news to create whipsaws.

Rather than focusing on individual tariff announcements, Markiewicz said investors are increasingly asking broader questions about market cycles.

"It's all about where we are in the cycle," he said. "Where are we in the AI cycle? Or the EV cycle?"

Those questions, he noted, are shaping how traders position around earnings, macro data, and policy developments.

Volatility Is The New Normal

With tariffs, geopolitics, and policy uncertainty driving sudden reversals, volatility is now the operating environment. For ETF investors navigating EV and AI exposures, staying nimble and risk-aware has become essential.

In this market, the challenge isn't predicting the next headline, it's managing what happens when the market reacts to it.

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