Stocks have had a rough week, with the technology sector getting hit particularly hard. But equities are trying to stabilize so far on Friday. Gold, silver, and crude oil are lower, while Treasuries and the dollar are mostly flat.
“Trump Trades” are in trouble. Many of the stocks, sectors, and asset classes that rallied into and after the election are reversing...in some cases, strongly. As the Wall Street Journal notes here, foreign stocks in several countries targeted with tariffs are outperforming the US S&P 500. Yields are slipping so far in 2025, while the US dollar is cooling after a late-2024 run.
IBIT, TSLA, MAGS, FXI, TLT (YTD % Change)
Plus, shares of Elon Musk-led Tesla Inc. (TSLA) are plunging. Bitcoin and other cryptocurrencies are sinking. And big-cap technology names are struggling. The chart here shows the year-to-date performance of the iShares Bitcoin Trust ETF (IBIT), TSLA, the Roundhill Magnificent Seven ETF (MAGS), the China Large-Cap ETF (FXI) and the iShares 20+ Year Treasury Bond ETF (TLT). The first three are all down notably, while the latter two are up.
TSLA had surged partly on the assumption Musk’s close alliance with President Trump would help boost profits at his companies. Cryptos rocketed on hopes Trump’s lighter regulatory touch would lead to a business boom. Big-cap tech had thrived on hopes for more M&A due to lighter regulation, plus a ramp up in the Artificial Intelligence (AI) spending boom. Time will tell if the initial rallies – or the subsequent declines – turn out to be “right” in the longer term.
Meanwhile, China vowed it would fight an additional 10% tariff that Trump promised with “all necessary measures.” The president had already implemented a 10% duty on Chinese imports, and the new round is slated to take effect March 4. That said, financial and military officials in Beijing and Washington continue to hold talks aimed at keeping things from spiraling out of control – even as Trump and Chinese President Xi Jinping haven’t yet spoken.
