This week marked a tectonic shift in the global macro landscape.
On what President Trump declared “Liberation Day”, the White House announced the most sweeping US trade tariffs in over a century. Instead, markets interpreted it as Liquidation Day, triggering a synchronised global sell-off and a wave of forced de-risking across asset classes.
What began as controlled unease escalated into a full-blown risk-off capitulation, with no corner of the market spared. As headlines rolled in, it became clear that this was more than a knee-jerk reaction — it was a repricing of growth, policy, and the rules of engagement in global trade.
Macro: Tariffs, Tumbles, and the Growth Reckoning
The macro fallout was immediate and far-reaching. The S&P 500 fell 4.8% – its largest one-day drop since the COVID shock of March 2020 – as investors scrambled to de-risk, while gold surged to fresh all-time highs above USD 3,160. Meanwhile US 10-year Treasury yields plunged below 4%, hitting six-month lows as investors fled to safety and ramped up bets on Fed rate cuts. The USD tumbled to a five-month low, led by sharp gains in traditional safe havens like the yen and franc with franc surging nearly 3% versus USD at one point. Meanwhile, the euro strengthened, as the market began discounting US resilience in the face of prolonged trade headwinds. Some retracement in the USD heading into the NFP and the weekend seems plausible and we are already seeing this in some high beta currencies but the broader tone remains risk-averse.
Crypto: Market Exhaustion Meets Macro Shock
Crypto was certainly not immune from the broad sell-off this week and found itself directly in the line of fire. BTC briefly broke through USD 88,000 as Trump speech began before reversing sharply and sliding to lows near USD 81,000 — triggering another wave of liquidations as market soon realised that the new era of Trump trade is not bullish as sweeping reciprocal tariffs were announced. ETH held critical support around USD 1,750, but altcoins suffered heavily, with multiple names posting double-digit weekly losses.
SOL broke decisively below the USD 120 handle, pressured not only by the broader macro stress but also by a significant unlock event today: according to Arkham, over USD 200 million of staked SOL is set to be unlocked today — the largest single-day unlock until 2028. Expect underperformance in SOL and pressure on SOLBTC, which remains in a steady downtrend.
This was more than just a macro spillover. Light positioning, a lack of narrative, and thin liquidity created the conditions for a sharp flush across the board. While a short-term relief rally cannot be ruled out, any upside from here will likely be met with hesitation until we get a clearer macro signal.
Looking Ahead: NFP + Powell = Volatility Reloaded
All eyes turn to today’s non-farm payrolls (consensus is +135,000) and Fed Chair Powell’s remarks.
A weaker-than-expected jobs print would cement the narrative of a slowing US economy, giving the Fed cover to cut rates. Markets are currently pricing in four 25bp cuts in 2025 — a dovish path that could support risk sentiment if confirmed.
It is not the tariffs themselves, it is what they signal — a world hurtling back toward protectionism, fragmentation, and policy unpredictability. Combine that with slowing growth and political instability, and you have the ingredients for sustained volatility.
The broader takeaway: growth fears are now firmly in the driver’s seat. A stagnant global economy, overlaid with aggressive trade actions, has created a perfect storm for volatility, forcing investors to reconsider their assumptions on everything from inflation to rate paths.
As always it is important to stay agile and remain ready for more policy-induced chaos.
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