According to Summer Zhen and Samuel Shen, some hedge funds are selling off most or all of their stock holdings due to President Donald Trump's trade war causing significant market losses and limiting their ability to trade with borrowed funds. Stock markets worldwide have plunged in response to Trump's tariffs announcement, with bonds now being seen as a safe haven and a bet on potential interest rate cuts by the Federal Reserve, a reversal from market expectations before Trump's presidency. The sell-off on Wall Street has been intense as investors exit U.S. markets after betting on the country's economic strength. The S&P 500 index dropped by 10.5% over two days, resulting in a $5 trillion market value loss. Hedge funds like Spring Mountain Pu Jiang Investment Management in Shanghai have liquidated their stock positions due to the uncertain geopolitical environment and escalating global recession risks. Strategies like long-short equity have struggled due to increased market volatility, leading to a decrease in hedge funds' net leverage. J.P.Morgan analysts have estimated significant equities to be sold off to reduce risk exposure, particularly in leveraged exchange-traded funds, notably in tech stocks. Hedge funds typically trade using margin accounts, which involve borrowing funds from prime brokers. Following market losses, brokers might require investors to add cash to their accounts or sell off securities. Even traditionally safe assets like gold have seen a decline in value since Trump's tariff announcements.