Trump's trade war overturns the market, the Federal Reserve turns a blind eye! Former Wall Street star funds collapse collectively.

With Powell clearly refusing to bail out the market this week and attracting fierce criticism from Trump, Wall Street, which has been continuously plummeting under the impact of tariffs, is desperate for a life-saving straw. How desperate? Just look at the comprehensive failure of all types of investment strategies this year - from large-cap stocks to small-cap stocks, from cryptocurrencies to corporate bonds, the returns of all asset classes are showing a cliff-like decline. Data from Bloomberg Intelligence shows that under the impact of tariff aftershocks, 90 of the best-performing 100 exchange-traded funds last year have fallen in 2025, with an average decline of 13%. Meanwhile, various long-dormant trading strategies are making a comeback: 9 out of the 20 worst-performing stock mutual funds in 2024 have already achieved positive returns this year. This signifies that investment managers are facing the most disruptive economic policy shock in decades, a policy that could fundamentally alter the American consumer and business ecosystem. As profit alarms are sounding in the American corporate sector, market risk appetite is shrinking, merger activity is declining, and traders are pouring into safe-haven assets such as cash and gold, with related targets receiving huge inflows of capital. Richard Cook, co-founder of Alabama's Cook & Bynum Capital Management, stated: "People used to think that the U.S. had no political risk, macroeconomic risk, and GEO Group Inc. political risk, and was a safe haven for global funds. But the policy changes of this administration are shaking this perception." According to data provided by David Cohne of Bloomberg Intelligence, benefiting from a focus on Mexican, Chilean, and German companies, Cook's fund has risen nearly 14% against the tide in 2025, ranking in the top 2% of all American funds - whereas the fund was at the bottom in 2024. This kind of "comeback" is quite common among fund managers who have performed well this year. From soaring tech stocks to digital asset trading, ETFs that surged 150% last year are plummeting in 2025. Grayscale Bitcoin Trust ETF (GBTC.US), which surged over 100% in 2024, has fallen nearly 10% this year; Invesco S&P 500 Momentum ETF (SPMO.US), which rose 45% last year, is down 7% in 2025; Defiance Quantum ETF (QTUM.US) jumped about 50% last year, but is now down over 10%. Federal Reserve Chairman Powell's statement this week shattered expectations in the market that the turbulence in April would quickly subside. He warned that rapidly evolving trade policies could trigger inflation, forcing the Fed to be unable to provide assistance. Trump then demanded Powell's dismissal, leading to the most intense confrontation in the market in months, a drama that is sure to continue. Sharp reversal This shockwave has affected all asset classes, even tech stocks and corporate bonds, which were thriving in January. The S&P 500 index fell 1.5% this week, with 9 out of the past 12 weeks recording losses; the U.S. dollar index fell 0.7% this week, with a total decline of over 6% this year; bond market volatility continues to hover at post-election highs. Amy Wu Silverman, head of capital markets derivative strategies at Royal Bank of Canada, stated: "People are anxiously questioning whether the U.S. is still the same as it used to be. All traditional safe-haven assets have failed to serve as safe harbors this time, even defensive assets like the 'seven giants' have malfunctioned." This week, multiple countries intensified negotiations with the U.S., trying to avoid high tariffs that Trump has temporarily imposed on about 60 trading partners. Despite the temporary relief, the World Trade Organization has revised down its annual forecast, stating that global trade volume will decrease by 0.2% in 2025, compared to a potential growth of nearly 3% without new tariffs. Resistance against the American Financial Group, Inc.'s "order" is now creating new winners in international investment strategies, value stocks, and historical safe-haven assets such as bonds and precious metals. The Gold ETF-SPDR (GLD.US) has become one of the strongest money-attracting ETFs in the U.S. as of April, surpassing the $100 billion mark for the first time. The fund attracted $8.4 billion in net inflows in 2025, even exceeding the fundraising amount of the Nasdaq 100 ETF-Invesco QQQ Trust (QQQ.US). Investors seeking refuge have also poured into short-term bond ETFs, including the 0-3 month U.S. Treasury Bond ETF-iShares (SGOV.US), which attracted about $14 billion in 2025, surpassing any annual fundraising record in its five-year history. Similarly, the 1-3 month U.S. Treasury Bond ETF-SPDR (BIL.US) also attracted nearly $13 billion. Both funds have attracted significantly more funds than the S&P 500 ETF-iShares (IVV.US), which has fallen 10% this year yet remains popular. James St.Aubin, Chief Information Officer of Ocean Park Asset Management, responsible for managing 12 trend-following strategies with $5 billion in assets, has shifted to a cash position. His trend-following strategy model turned negative in early April, leading to a significant reduction in stock and fixed income positions, with cash positioning rising to 40%-100%, hitting a new high since 2022. "I am bearish," he said. "There is a lack of positive news to drive consumption and investment currently, and the market is frozen, which often leads to a downward spiral." Scott Piper, Chief Portfolio Manager of DWS Latin America Stock Fund, has benefited from the volatility. After a 28% crash in 2024, his fund rebounded strongly by 13% in 2025, with a weakened dollar helping his strategy. "The immediate priority is to rebuild the credibility of the U.S. market - massive deficits and slowed growth have called it into question."