BlockTempo's real-time market pulse (survey) shows that due to Trump's tariff policy potentially ending the era of US market dominance or "exceptionalism", investors' bullish sentiment on US Treasuries has reached the highest level in at least three years, relative to US stocks.
Support for US Bonds Reaches New High Since 2022
BlockTempo surveyed 504 market participants this week, and the results show that most respondents believe US bonds are expected to outperform US stocks in the next month. The gap is quite large, with 77% of respondents bullish on US Treasuries, the highest proportion in this survey since 2022.
Does Tariff Policy Destroy the Golden Age of US Stocks?
These survey results highlight a major shift in market sentiment. After Trump's re-election, the so-called "Trump Trade" had driven a stock market surge, with the market expecting continued US economic growth and strong asset demand.
However, this trend has gradually eroded as Trump imposed tariffs on Canada, Mexico, China and Europe, with the trade war triggering a stock market sell-off that has pushed the S&P 500 index down 10% from its historical high, entering a correction.
Trump's aggressive policies have further highlighted concerns that the market's dominance of US stocks may have peaked. Only 9% of respondents believe the US stock market's global market share will return to its historical high by the end of 2025, while about 40% expect US stock market share to fall to its lowest level in over a year.
Moreover, the vast majority believe that tariff policy, rather than Fed policy, will be the key factor affecting stock market valuations.
Hedging Demand Stimulates Rise in US Bonds and Gold Prices
On the other hand, due to the risks posed by Trump's tariff policy, the US stock market has been in a continuous decline, leading many investors to take hedging measures. Among the respondents, nearly half expect to reduce their positions in the S&P 500 index in the next month, while less than 20% plan to increase their positions.
At the same time, more than half of the investors expect the 10-year US Treasury yield to decline in the next month, which is in line with the current trend in the US bond market.
Due to the increased demand for hedging, a lot of capital has started to flow into the US bond market. According to data from ABMedia, the current 10-year US Treasury yield has reached 4.3%, remaining in the low range for the year. From the January high (4.79%) to now, it has fallen by 49 basis points.
In addition, the price of gold, another safe-haven asset, has also broken through $2,990 today, reaching a new all-time high. As for whether Trump's subsequent policies will further disrupt the US and global economies, further deepening investors' hedging demand, it is worth our continued attention.
