Wall Street Battered Again by Trump Chaos as New Winners Emerge

For now, the worldwide orientation is wise. US equities and bonds have recently experienced an average daily movement that has not been witnessed since the turbulent days of the Federal Reserve’s inflation-fighting campaign.

Ben Inker has been waiting for this market. Inker is part of a group of investors profiting from this year’s volatility spiral as Wall Street rebels against President Donald Trump’s tariff policy, with stocks down almost 2% this week despite Friday’s significant rally.

Due to excessive wagers on inexpensive shares and stocks from Japan to Europe, the longtime critic of the US bull run is currently sitting on a 4% return in his benchmark portfolio, outperforming most of his peers. For now, the worldwide orientation is wise. US equities and bonds have recently experienced an average daily movement that has not been witnessed since the turbulent days of the Federal Reserve’s inflation-fighting campaign.

In an interview following the more than $5 trillion equities meltdown, 54-year-old Mayo Van Otterloo, co-head of asset allocation at Grantham, stated, “This does feel pretty violent, mostly because the market had been pretty tame for a couple of years.” “I understand what the market is doing very well.”

The Boston-based manager is profiting from markets previously thought to be immune to worries about concentration and skyrocketing values due to the trade war. Retirement accounts, hedge funds, and retail speculators have all suffered, even on Friday when the S&P 500 had its most significant recovery from a seven-month slump. However, it has been a market to enjoy for longtime doubters of the tech-driven boom, such as Inker’s counterparts in value investing and foreign stocks.

Wall Street is known for its wild rides. However, market experts are struck by how special this time seems. One factor that accounts for a large portion of trade activity is Donald Trump.

Indeed, at least from the perspective of a new president, Trump’s early days in office had a significant influence on the market. The US market recently saw its worst start for a new administration since the global financial crisis amid growing anxiety over tariff threats and federal layoffs. Since Richard Nixon started his second administration in 1973, the dollar has been on track to suffer its most significant post-inauguration decline.

It contributed to another brutal week for assets, with the S&P 500 culminating in a 10% decline in only 16 sessions on Thursday before rising on Friday. As junk bond spreads expanded, credit markets also began to validate the growth anxiety. The US dollar suffered for the second week, increasing its March loss to 2.5 percent.

Citigroup Inc. offers another perspective on the gyrations. Its global risk indicator, which looks at the estimated volatility of 22 cross-asset exchange-traded funds, is at its highest since 2022.

A few weeks ago, it was a different story. Bitcoin was above $100,000, junk bond spreads were the narrowest since 2007, and stocks set record after record. Seven stocks accounted for around one-third of the S&P 500, an unprecedented concentration.

Regardless of the cause, many Wall Street critics believe that excesses like those should be undone. For Jeff Muhlenkamp, whose $230 million Muhlenkamp Fund has defied the general market trend to squeeze out a profit this year, the risk-off retreat also seems like an opportunity. He is trying to find deals in the chemical and chip manufacturing industries.

According to Muhlenkamp, Trump inherited one of the most expensive stock markets in history, with the S&P 500 trading at 27 times reported profits in January. When doubts began to swirl around the president’s policy agenda, and China began to challenge America’s hegemony in artificial intelligence, he saw it as a company ready to be sold.

According to Muhlenkamp, “all this uncertainty will make people nervous because the market was costly anyway.” They will thus take a slight step back. They have less leverage now than they did before. And that’s good for you.

It will also be remembered as a week when cautious traders once more sought refuge in safe havens like government bonds and gold. Since Trump’s inauguration in January, the price of gold has increased by 10%, the strongest start to a presidential cycle since Jimmy Carter’s tenure in 1977. Over the period, Treasuries have been up 2.5%, a gain not seen since Bill Clinton in 1993 at this point in a cycle.

Market observers have been anticipating a so-called “Trump put,” in which the president steps in to stop more losses or reduce volatility, for weeks due to the volatility’s tenacity. However, sentiment is still weak at the moment, and trust in the oligarchy of US digital companies is being put to the test.

Fans of overseas equities, which have lagged behind the blazing Magnificent 7 for over ten years, will benefit significantly from this. Jitania Kandhari is one of the people at Morgan Stanley Investment Management who is finally reaping the rewards of a rotation out of that group.

The solutions and multi-asset department deputy CIO, who co-oversees the Passport Overseas Equity Portfolio, stated, “US concentration was up, valuations were extended.” “I thought you might need a correction.”