Trump makes money by taking advantage of bad news in the U.S. stock market

Trump makes money by taking advantage of bad news in the U.S. stock market

1. Trump warns of “large tariff hike on China,” global markets plunge

The U.S.-China trade conflict intensifies as former President Trump warned of massive additional tariffs, saying “the summit with China is meaningless.” As a result, the S&P 500 plunged -2.7% and the Nasdaq 100 plunged -3.5%. The sell-off is focused on technology stocks, coupled with concerns over AI bubbles.

2. Risk Asset Hits Overall: Crude Oil, Cryptocurrency Plummet, Safe Assets Rally

WTI oil prices plunged more than -4% and Bitcoin fell -4%. On the other hand, the 10-year U.S. Treasury yield fell 8 basis points to 4.06%, and gold prices surged. The VIX volatility index surged to 22, reflecting fears.

3. Realizing profits in AI-themed stocks, expanding the signal to resolve bubbles

Market experts interpret the sell-off as a profit-taking trend in AI-themed stocks, which have been overheated due to trade issues. In particular, the AI sector has been showing relatively independent gains this year, so it was used as a justification for “cleaning up high points.”

4. Technological Overheating Signals Realize, Implications for Entry into Adjustment Section

Multiple Technical Analysts Warn Of Recent Overbought Signals And Price-Momentum Gap. S&P 500 Raises Possible 5% To 10% Adjustment. But it’s not a structural drop, and it’s interpreting it as a short-term correction. The market is currently entering a short-term oversold segment.

5. Fund funds flow ‘absurd optimism’… Exploring Opportunities in Volatility

According to BofA, global equity funds +$20 billion and bond funds +$25.6 billion inflows last week. Even cash funds are up +$73 billion. This means the inflow of funds continues even amid uncertainty. Investors are still looking for “post-adjustment opportunities.”

The stock market reacted similarly to the April tariff scare as Trump warned of stronger measures, signaling that trade negotiations with China were in fact stranded. This is the “event risk” warned in today’s morning briefing that the market has already reduced its positioning to prepare for a possible adjustment, and the market has begun to collapse quickly.

It is still unknown whether Trump’s remarks will be implemented, but the strong-arm phase with China is expected to be an inevitable trend for the time being. In particular, it should be noted that the hegemonic war has entered Phase 3, which is transferred to trade, technology and raw materials, given that the core of the confrontation is strategic raw materials such as rare earths.