The Trump tariff storm overturns the market, and the Federal Reserve stands by and does nothing! Wall Street's former star funds collapse collectively

According to the Zhitong Finance APP, as Powell clearly rejected market rescue this week and faced fierce criticism from Trump, Wall Street, which has been continuously declining under the impact of tariffs, is desperately seeking a lifeline.

To what extent is the desperation? Just look at the comprehensive failure of various investment strategies this year—from large-cap stocks to small-cap stocks, from cryptocurrencies to corporate bonds, all asset classes have seen a cliff-like drop in returns.

Data from Bloomberg Intelligence shows that under the shock of tariff aftershocks, 90 of the 100 best-performing exchange-traded funds last year experienced declines in 2025, with an average drop of 13%. Meanwhile, various long-dormant trading strategies are making a comeback: 9 of the 20 worst-performing stock mutual funds in 2024 have achieved positive returns this year.

This marks that investment managers are facing the most destructive economic policy shock in decades, which could fundamentally change the consumer and business ecology in the United States. As American businesses sound the profit alarm, market risk appetite fades, and merger and acquisition activities shrink, traders are pouring into safe-haven assets like cash and gold, which have seen massive inflows.

Richard Cook, co-founder of Cook & Bynum Capital Management in Alabama, stated: "People used to think that the U.S. had no political risk, macroeconomic risk, or geopolitical risk, making it a safe haven for global funds. However, the policy changes of this administration are shaking that perception."

According to data from Bloomberg Intelligence provided by David Cohne, thanks to a focus on companies in Mexico, Chile, and Germany, Cook's fund has risen nearly 14% against the trend in 2025, ranking in the top 2% of U.S. fund performance—while the fund was at the bottom in 2024. This "desperate rebound" is quite common among fund managers who performed well this year.

From soaring tech stocks to digital asset trading, ETFs that surged by as much as 150% last year have all fallen in 2025. The Grayscale Bitcoin Trust ETF (GBTC.US), which skyrocketed over 100% in 2024, has dropped nearly 10% this year; the Invesco S&P 500 Momentum ETF (SPMO.US), which rose 45% last year, has fallen 7% in 2025; the Defiance Quantum ETF (QTUM.US), which jumped about 50% last year, is now down over 10%.

Federal Reserve Chairman Powell's statement this week shattered market expectations for a quick resolution to the turmoil in April, warning that rapidly evolving trade policies could trigger inflation, forcing the Fed to refrain from intervention. Trump immediately called for Powell's dismissal, marking the most intense confrontation in this market drama that is set to last for months, leaving investors holding their breath Dramatic Reversal

This shockwave has affected all asset classes, including technology stocks and corporate bonds, which were still thriving in January. The S&P 500 index fell 1.5% this week, with 9 out of the last 12 weeks showing declines; the dollar index dropped 0.7% this week, with a cumulative decline of over 6% for the year; the volatility in the bond market continues to hover at high levels since the election.

Amy Wu Silverman, head of derivatives strategy at Royal Bank of Canada Capital Markets, stated: "People are anxiously questioning whether America is still the America it once was. All traditional safe-haven assets have failed to act as a refuge this time, even defensive stocks like the 'seven giants' have faltered."

Multiple countries have intensified negotiations with the U.S. this week, attempting to avoid the high tariffs that Trump had imposed and then suspended on about 60 trading partners. Despite gaining a temporary breather, the World Trade Organization has still downgraded its annual forecast, stating that global trade volume will decline by 0.2% in 2025, which could have grown by nearly 3 percentage points without new tariffs.

The "resistance" against the U.S. financial order is creating new winners in international investment strategies, cheap stocks, and historically safe-haven assets like government bonds and precious metals.

The gold ETF-SPDR (GLD.US) has become one of the strongest capital-raising ETFs in the U.S. as of April, surpassing the $100 billion mark for the first time. The fund saw a net inflow of $8.4 billion in 2025, even exceeding the fundraising amount of the Nasdaq 100 ETF-Invesco QQQ Trust (QQQ.US).

Investors seeking refuge have also poured into ultra-short-term bond ETFs, including the 0-3 month U.S. Treasury ETF-iShares (SGOV.US), which attracted about $14 billion in 2025, surpassing any annual fundraising record since its inception five years ago. Similarly, the 1-3 month U.S. Treasury ETF-SPDR (BIL.US) attracted nearly $13 billion. Both have raised significantly more than the S&P 500 ETF-iShares (IVV.US), which has fallen 10% this year yet remains popular.

James St.Aubin, Chief Information Officer at Ocean Park Asset Management, which manages 12 trend-following strategies and $5 billion in assets, has shifted to cash allocation. After its trend-following strategy model turned negative in early April, it significantly reduced stock and fixed-income positions, raising cash allocation to 40%-100%, a new high since 2022.

"I hold a pessimistic view," he stated, "Currently, there is a lack of positive news to drive consumption and investment, and the market is in a frozen state, which often triggers a downward spiral."

Scott Piper, Chief Portfolio Manager of DWS Latin America Equity Fund, has benefited from the volatility. After a 28% plunge in 2024, his fund rebounded strongly by 13% in 2025, aided by a weaker dollar that supported his strategy. "The urgent task is to rebuild the credibility of the U.S. market—huge deficits and slowing growth have raised serious doubts." ”