Hedge Funds and Investment Funds Offload $40 Billion in Stocks After Trump Tariffs

Bank notes sent to clients showed that global hedge funds and leveraged exchange-traded funds (ETFs) have offloaded more than $40 billion worth of stocks at a rapid pace amid investor pessimism after US President Donald Trump announced higher-than-expected tariffs.

On Wednesday, Trump decided to raise tariffs to the highest level in more than a century, wiping more than $4 trillion off the market value of S&P 500 companies since then.

JP Morgan said in a note that volatility-targeting portfolios had to sell between $25 billion and $30 billion worth of stocks to reduce risk.

The bank added that leveraged ETFs had to offload an additional $23 billion worth of stocks to rebalance by the close on Friday, mostly in the technology sector.