Wall Street’s “sell America” trade wavered on Thursday as US stocks roared higher in a three-day rally sparked by easing trade tensions, although mixed messages from the Trump administration tempered investor enthusiasm and kept markets on edge over the durability of any potential deals.
The unusual move, pulling back from both risk assets and volatility hedges, is seen as a rare dislocation, with strategists dubbing it the infamous “sell America” trade. But those trends began to reverse this week as investors bought back into US debt and currencies.
On Wednesday, the 10-year yield dropped to around 4.3%, and the dollar edged closer to the psychologically important 100 level. Meanwhile, gold (GC=F), which had set several records in recent days as investors flocked to non-dollar-denominated globally recognized stores of value, retreated on Wednesday to around $3,290 per ounce — further signaling that the “sell America” trade was winding down.
But Thursday’s trading action saw gold prices once again spike to around $3,340 an ounce as the dollar also lost steam. Bucking the trend: 10-year Treasury yields, which had bounced higher late Wednesday but returned to around 4.3% levels on Thursday.
In addition to what seemed like more favorable trade developments, Trump’s decision to backtrack on his attempt to remove Federal Reserve Chair Jerome Powell helped calm investor concerns.
Since the president’s “Liberation Day” announcement earlier this month, investors have been navigating a volatile market compounded by multiple economic shocks that include tariffs, slowing growth, and escalating geopolitical tensions.
“There was more of an attention paid to the market volatility, especially the 10-year yield, not just the stock market,” Keith Lerner, Truist co-chief investment officer and chief market strategist, told Yahoo Finance. “I think there’s a ‘put’ on how far or how high Trump will feel comfortable with the 10-year Treasury yield as well.”
President Trump speaks with reporters as he participates in a ceremonial swearing-in of Paul Atkins as chair of the Securities and Exchange Commission in the Oval Office of the White House on April 22, 2025, in Washington. (AP Photo/Alex Brandon) ·ASSOCIATED PRESS
Typically, when stocks and bonds move in the same direction, it’s due to soaring inflation that drives the dollar higher. This time, however, a crisis of confidence appeared to be disrupting the usual dynamics.
Key members of the president’s team, including Treasury Secretary Scott Bessent, have attempted to assuage investor concerns.
In a speech on Wednesday, Bessent said with regard to tariffs, “I wish to be clear, America First does not mean America alone. To the contrary, it is a call for a deeper collaboration and mutual respect among trade partners.”
Bessent stressed the importance of maintaining a stable US dollar amid recent market fluctuations, saying, “The US will remain the world’s reserve currency throughout my lifetime.”
Francesco Pesole, FX Strategist at ING, told Yahoo Finance the White House had initially anticipated a stronger dollar in response to tariffs, which would protect US consumers from higher prices. Instead, that decline in confidence triggered the dollar sell-off.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City on April 23. (Reuters/Brendan McDermid) ·REUTERS / Reuters
This was likely “not something that Bessent was happy with,” Pesole said. “I believe that there is an ongoing attempt to reestablish at least some stability in the dollar for the period that the first inflationary hit will occur in the US.”
As investors continue to digest fast-moving headlines, some strategists are warning that more volatility is likely ahead.
“I think it’s a relief rally,” Chris Versace, chief investment officer at Tematica Research, said on Wednesday. “People were so concerned about the impact of [China tariffs]. The impact of the economy, the impact of earnings guidance that we’d be getting over the next couple of weeks. So to me, it’s more of a relief rally.”
But “there’s still going to be an impact,” he warned. “I think we’ll have to wait it out and see exactly where these new round of potential tariffs go. At the same time, what is China’s response to this? They have reciprocal tariffs on us. Are they willing to play ball? We’ll have to see.”
StockStory aims to help individual investors beat the market.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
