【MACRO Alert】 Trump's tariffs hit global markets, and risk aversion swept the investment field

The Trump administration's recent announcement of the "toughest tariffs in a century" is reshaping the global market landscape, triggering a stock market crash, a surge in demand for safe-haven assets, and a widespread market panic. From the influx of funds into gold ETFs to the violent turmoil in global stock markets, investors are re-evaluating their risk asset allocation strategies, while concerns about a recession are growing.

一、Tariff policy triggers risk aversion in the market

Trump's new tariff regime has had a widespread impact on the global economy, and investors have flocked to safe-haven assets. Data shows that gold ETFs (such as GLD and IAU) attracted more than $650 million in inflows last week, and the cumulative inflows since the beginning of the year have reached $9.9 billion. At the same time, ultra-short bond ETFs (such as SGOV and BIL) also recorded $3.5 billion in inflows, showing investors' strong demand for cash proxy tools.

Market analysis pointed out that Trump's tariff policy has not only exacerbated trade tensions, but also raised concerns about a global recession. Bank of America called it "the biggest shock to modern global trade", while UBS warned that if the tariff policy continues, the US economic situation may deteriorate further.

二、Global stock markets plummeted and panic spread

At the opening of Monday, global stock markets suffered a "Black Monday"-style plunge. S&P 500 futures fell more than 4.7%, Nasdaq futures fell more than 5.5% at one point, and Dow futures fell more than 4%. Asian markets also plummeted, with the A-share ChiNext Index falling nearly 10% and the Hong Kong stock Hang Seng Index closing down 10.7%. The VIX panic index of the US stock market soared to over 40, reaching its highest level since the outbreak of the epidemic in 2020.

Market analysts believe that this panic sentiment is similar to the market turmoil at the beginning of the COVID-19 pandemic in March 2020. The 200-week moving average of the S&P 500 is facing a test. Historical data shows that the index's fall below this key level often heralds the arrival of a bear market. Former Treasury Secretary Lawrence Summers warned that Trump's tariffs could hit the economy by $30 trillion, and an economic slowdown is "almost inevitable."

3. Risk aversion differentiation between precious metals and currency markets

Although gold is generally regarded as a safe-haven asset, precious metals were not spared when the market was extremely panicked. In early trading on Monday, spot gold fell 0.56% at one point, and silver fell more than 2%. Analysts believe that investors are selling precious metals to make up for losses in other assets.

At the same time, the yen rose by more than 1% due to its safe-haven properties, and 10-year U.S. Treasury futures jumped, with yields falling by 14 basis points. The dollar fell below 145 yen against the yen for the first time since October last year. Risk currencies such as the Australian dollar became the target of selling, and the short positions of leveraged funds increased for the third consecutive week.

三、Market Forecast and Investor Strategies

Faced with the violent market turmoil, analysts have different views on the market outlook. JPMorgan Chase expects the US economy to fall into recession due to tariffs, and the full-year GDP growth rate has been lowered from 1.3% to -0.3%. UBS Global Wealth Management downgraded the US stock rating to neutral and advised investors to remain cautious.

However, some investors believe that the current plunge may create a "great buying opportunity". JPMorgan Asset Management believes that the S&P 500 index has entered a buy-on-dip range. Historical data shows that the average price-to-earnings ratio before the recession was 15.6, while the current price-to-earnings ratio remains around 22. CNBC commentator Jim Cramer warned that if Trump does not adjust the tariff policy, the market may repeat the crash of "Black Monday" in 1987. But he also advised investors to remain calm and believed that long-term investment is still a rational choice.

V. Conclusion: Investment Decisions in Uncertainty

The global market turmoil caused by Trump's tariff policy continues, and risk aversion has become the main theme of the current market. From the influx of funds into gold ETFs to the drastic adjustments in the stock market, investors are re-examining the balance between risk and return. In a market environment shrouded in uncertainty, short-term volatility may intensify, but long-term investors need to pay attention to potential opportunities for policy shifts and economic recovery. As Cramer said, "Recognize that there will be some pain, but you can't avoid it - sticking to it is the key."