Liberation Day & the Dollar: 13 May 2025
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Market Mood
The April 2 "Liberation Day" tariff announcement triggered sharp market volatility, with U.S. equities initially falling nearly 20% before rebounding on hopes of a U.S.-China deal, though the U.S. dollar has remained weaker amid capital outflows and trade tensions. Despite strong earnings from tech giants like Microsoft and Meta, investor confidence is being tested by conflicting economic data, weakened manufacturing indicators, and tariff-related pressures on major companies like Apple and Amazon. The Trump administration’s prioritization of tariffs over pro-growth reforms has raised fears of a structural shift in global capital away from the U.S., contributing to a nearly 10% decline in the dollar over his first 100 days. While no clear alternative to the dollar exists, geopolitical strains and protectionist policies are fueling a long-term reassessment of U.S. leadership in global markets. Against this backdrop, Hawthorne has maintained diversified exposure and equity protection strategies, helping cushion the impact of April’s downturn, but remains cautious given ongoing uncertainty around policy direction and its potential impact on company fundamentals and investor behavior.