Hedge Funds and ETFs Dump $40 Billion in Stocks After Trump's Tariff Move

Global Hedge Funds and ETFs Offload Over $40 Billion in Stocks Following Trump's Tariff Announcement

April 25, 2019 - In the wake of President Trump's announcement of a new round of tariffs on Chinese goods, global hedge funds and ETFs have collectively offloaded over $40 billion in stocks, according to data from Benzinga.

The sudden and significant shift in investor sentiment was triggered by the Trump administration's decision to impose tariffs on approximately $200 billion worth of Chinese goods, effective May 10. The move is seen as a major escalation in the ongoing trade war between the world's two largest economies.

As a result, hedge funds and ETFs have been forced to reposition their portfolios, selling off stocks in industries that are likely to be most affected by the tariffs. This includes companies that rely heavily on Chinese imports, such as technology and consumer goods firms.

According to Benzinga's data, the biggest losers in the sell-off were technology and consumer goods stocks, with shares of companies like Apple Inc. (AAPL), Amazon.com Inc. (AMZN), and Microsoft Corporation (MSFT) all experiencing significant declines.

In addition to the technology and consumer goods sectors, hedge funds and ETFs also offloaded stocks in the industrial and materials sectors, which are likely to be impacted by the tariffs.

The sudden and significant shift in investor sentiment has led to a volatile trading environment, with many stocks experiencing wild swings in value. The Dow Jones Industrial Average (DJIA) and S&P 500 Index (SPX) both fell sharply on the news, with the DJIA dropping over 250 points and the SPX falling by over 1.5%.

While the tariffs are seen as a major risk to global economic growth, many investors are also viewing the move as a buying opportunity, particularly in sectors that are likely to benefit from the tariffs, such as agriculture and manufacturing.

As the trade war continues to escalate, investors will be closely watching the market for signs of a potential bottom. In the meantime, hedge funds and ETFs will continue to reposition their portfolios in an effort to minimize their exposure to the tariffs.