Markets reassess ‘sell America’ trade as yields dip, dollar wobbles

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.

Earlier this week, investors dumped both US stocks and traditional safe havens, with the 10-year Treasury yield (^TNX) spiking above 4.4% and the US dollar (DX-Y.NYB) sinking to its lowest level since 2022.

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.

Read more: The latest news and updates on Trump’s tariffs

But the president has signaled he’s been paying attention to the noise, leading some strategists to suggest he may now be more focused on market reactions to his policies than before. Previously, the Trump administration claimed that it was not monitoring the stock market during the recent sell-off.

“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.”