Wall Street Unrest Lashes US Assets With Volatility

Global trade tensions continued to weigh heavily on Wall Street as the week came to a close, with a broad selloff in both U.S. Treasuries and the dollar reflecting the market’s growing unease. These typically safe-haven assets, which investors usually flock to in times of uncertainty, saw their appeal diminish in a volatile environment shaped by the U.S.’s aggressive trade stance.

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Friday’s market action offered little relief from the instability that’s rattled investors worldwide. President Donald Trump’s rapidly shifting trade strategy has left traders struggling to chart a clear course.

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Equities fluctuated throughout the day as investors tried to digest developments in the intensifying tariff dispute between the U.S. and China. Mounting concerns over a potential slowdown in global growth sent the dollar plunging to its lowest point in six months, while yields on 30-year U.S. Treasury bonds moved closer to the 5% threshold — a level not seen in years.

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Analysts at ING Bank NV, including strategist Francesco Pesole, wrote in a note that the market is now clearly in the grip of a full-fledged crisis of confidence in the U.S. dollar. “The dollar’s collapse is now functioning as a kind of real-time indicator of a broader ‘sell America’ sentiment,” they said.

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China, escalating the standoff, announced that it would raise tariffs on all American goods to levels between 84% and 125%. The Chinese Ministry of Finance didn’t hold back in its criticism, calling the Trump administration’s actions a “joke” and saying they were no longer worth responding to in kind. The ministry also issued a stern warning, promising a “resolute counterattack” if the U.S. continues to infringe on China’s rights and interests.

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Meanwhile, major U.S. banks began releasing their earnings, revealing a mixed picture of financial performance under growing market stress. JPMorgan Chase & Co. posted record-high equity trading revenues, yet cautioned investors about the increasingly bleak economic outlook. Morgan Stanley also reported surging trading income, driven by the recent spikes in volatility.

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JPMorgan CEO Jamie Dimon noted in the earnings report that the economy is currently “facing considerable turbulence.” He added that the bank’s clients are becoming more hesitant in the face of rising uncertainty linked to geopolitical risks and trade disputes.

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Investment management giant BlackRock Inc. also posted disappointing results, with net inflows falling short of expectations during the quarter, which concluded just before President Trump unveiled his latest round of tariffs.

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CEO Larry Fink compared the current market mood to the upheavals seen during the 2008 global financial crisis and the early stages of the COVID-19 pandemic. “Anxiety and uncertainty about where markets and the economy are headed are dominating client conversations,” Fink said in a statement.

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Bank of America Corp. strategist Michael Hartnett added to the chorus of caution, saying Trump’s tariffs were transforming the notion of U.S. exceptionalism into one of U.S. repudiation. He advised investors to sell into any market rallies until there’s evidence of Federal Reserve intervention or a reduction in trade tensions. Specifically, Hartnett suggested a bearish stance on equities until the S&P 500 falls to 4,800 points, alongside a bullish bet on two-year Treasuries.

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According to Hartnett, the combination of rising bond yields, falling stocks, and a weakening dollar is leading to a broad selloff across global assets, a situation that may eventually push policymakers into action. “Sell the rips in risk assets,” he advised.

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Elsewhere in financial markets, investors sought refuge in alternative assets. Gold climbed to an all-time high, breaking above $3,200 an ounce. Bitcoin also gained, rising 2.8%. The euro, meanwhile, strengthened by 1.4% against the U.S. dollar, moving to about $1.13.

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Commenting on the chaos, Olivier Baduel, head of European equities at OFI Invest AM in Paris, said the world’s leading trading nation — referring to the U.S. — has effectively “torn up the playbook.” He emphasized that the lack of a clear endgame is leaving markets in a state of confusion. “We’re witnessing a complete loss of visibility,” Baduel said. “We’re still very much in a phase of deep uncertainty.”

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