Highlights

• Trump administration’s sweeping tariffs trigger global trade war; euro surges 10% YTD vs USD, now above $1.13, as IMF cuts US 2025 growth forecast by 0.9 points1.
• Foreign investors, led by Europeans, dump $63B in US equities and $3B in corporate bonds since March; “buyers’ strike” for US assets intensifies dollar headwinds4.
• US Treasury sharply raises Q2 borrowing estimate to $514B (from $123B); Q3 borrowing seen at $554B, with cash balances expected at $850B by September5.
• S&P 500 down 7.9% in Trump’s first 100 days—the worst start since Nixon—erasing all post-election gains amid tariff shocks and persistent volatility14.
• Crude oil drops: WTI settles at $62.05, Brent at $65.86, pressured by demand fears, OPEC+ supply hike, and trade war fallout; Exxon, Chevron face buyback/dividend risks2.
• Bitcoin rallies near $95,000 (+10% in a week), fueled by $1.4B MicroStrategy purchase and $3.4B ETF inflows; institutional demand and “supply squeeze” intensify3.
• MicroStrategy now holds 2.6% of all Bitcoin; Vanguard Growth Index Fund increases BTC exposure via MSTR holdings11.
• BlackRock’s tokenized US Treasury fund grows sevenfold to $2.5B; six entities now control 88% of the $5.4B tokenized treasury market12.
• IBM announces $150B US investment over five years, including $30B for quantum R&D, amid pressure to bolster domestic tech amid trade tensions10.
• Texas judge overturns CFPB’s $8 credit card late fee cap; Wells Fargo gains regulatory relief as multiple consent orders are lifted9.
• Yemen strikes US carrier and Ashkelon in retaliation for US/Israeli actions; Red Sea tensions persist, raising geopolitical risk8.
• Spain declares national emergency after blackout shuts all nuclear plants; cause under investigation, major disruptions reported7.

Commentary

Markets are grappling with a potent mix of macro headwinds and shifting capital flows as the Trump administration’s aggressive tariff regime continues to reverberate globally1. The US dollar has weakened sharply—down 10% against the euro YTD—reflecting both foreign investor aversion to US assets and a broader reallocation of reserves14. The IMF’s downward revision to US growth and the exodus of $63B from US equities by foreign holders underscore the mounting pressure on US financial markets, especially as the Treasury sharply ramps up its borrowing needs for Q2 and Q3145. The “buyers’ strike” by foreigners is a critical risk for both the dollar and US fixed income, with potential for higher yields if domestic demand fails to fill the gap45.

Equities remain under heavy pressure, with the S&P 500 logging its worst 100-day start under a new administration since the 1970s14. The loss of post-election gains and persistent volatility reflect investor unease over policy uncertainty, trade war escalation, and the specter of recession141. The energy sector is particularly vulnerable: crude oil prices have slumped to multi-month lows as OPEC+ supply increases and demand fears mount2. Major oil companies like Exxon and Chevron, facing lower realized prices, may be forced to curtail buybacks and dividends, further weighing on sentiment2.

Amid this turmoil, capital is rotating into perceived safe havens and alternative assets. Bitcoin’s surge to near $95,000 is emblematic, driven by both institutional flows (notably $3.4B in ETF inflows and MicroStrategy’s $1.4B buy) and a narrative of insulation from fiat and trade-related volatility311. Tokenized real-world asset markets are also expanding rapidly, with BlackRock’s tokenized Treasury fund now at $2.5B, suggesting growing institutional appetite for blockchain-based fixed income exposure12. These trends highlight a search for yield and diversification outside traditional US markets312.

Geopolitical and operational risks remain elevated. Red Sea tensions, as evidenced by Yemen’s strikes on US and Israeli targets, keep shipping and energy markets on edge8, while Spain’s blackout and nuclear shutdown serve as a reminder of infrastructure fragility in Europe7. On the regulatory front, the rollback of CFPB rules and relief for major banks like Wells Fargo could provide a tailwind for financials, though broader market direction is likely to be dictated by macro and policy signals9.

Traders should watch for further dollar weakness, foreign demand for US Treasuries at upcoming auctions, and earnings commentary from energy majors on capital allocation124514. Crypto and tokenization flows bear monitoring as barometers of institutional risk appetite31112. Any signs of de-escalation in trade or the Red Sea could trigger sharp sectoral rotations, while continued volatility in US policy and funding markets remains the dominant theme1814.