Several hedge funds are liquidating their stock holdings due to the market turmoil caused by U.S. President Donald Trump’s trade policies. In the days following Trump’s announcement of reciprocal tariffs on nearly all countries, global stock markets have plummeted, and bonds have become both a haven and a bet on potential Federal Reserve rate cuts. William Xin, chairman of Spring Mountain Pu Jiang Investment Management, stated he had sold all his stock positions due to the uncertain geopolitical landscape and rising risk of a global recession. Analysts estimate that hedge fund leverage has dropped between 5% and 6%, nearing the lowest levels since late 2023. The volatility has also triggered margin calls, forcing investors to sell assets for cash. Even traditionally safe assets like gold have declined since the tariffs were announced on April 2. Experts warn that the selloff could continue as hedge funds unwind their positions sequentially. — new from Reuters
