Aspire Market Guides


Donald Trump at the New York Stock Exchange
‘Trump trades’ fuelled market growth in the wake of the US election in November – Alex Brandon/AP

Hedge funds have bet billions of dollars against Donald Trump’s America amid fears of a market crash.

Data from Goldman Sachs show there has been a surge in “short” bets against US stocks, meaning traders will make money when they fall in value, in a sign of growing concerns about the market.

In January, investors have placed 10 times more bets on US stocks falling than equivalent bets that shares in leading American companies would rise, the investment bank said. It suggests many traders are sitting on huge profits from the chaos earlier this week, when shares in big tech stocks slumped following a panic over the success of rival Chinese AI DeepSeek.

The increase in short bets marks a major turnaround in sentiment from November, when hedge funds piled into long bets on US stocks, predicting they would rise.

Hedge funds ploughed billions into so-called “Trump trades” in the immediate wake of the US election in November, on expectations the new president’s tax cuts and tariff policies would boost America’s economy.

A surge in clients giving their money to the funds in the wake of Mr Trump’s victory helped lift the amount of money managed by the industry to all-time highs of over $4.5 trillion (£3.6 trillion).

Mr Trump has also received significant support from high profile fund chiefs, including Bill Ackman, who has become a major opponent to diversity, equity and inclusion (DEI) initiatives since the Oct 7 2023 attacks on Israel.

In the run-up to the elections, Mr Ackman, who founded Pershing Square Capital Management in 2004, publicly endorsed Mr Trump. The billionaire hedge fund manager had previously donated millions to Super PAC organisations supportive of the Democratic Party.

Mr Trump subsequently appointed hedge fund manager and Republican Party donor Scott Bessent as his treasury secretary. Mr Bessent started his career at George Soros’s hedge fund in the 1990s before launching his own investment fund Key Square Group in 2015.

Ken Griffin, who founded Citadel in 1990, later also came out in support of Mr Trump in December, having held back from financially supporting the Republican candidate’s campaign. Mr Griffin, who has donated millions to various Republican candidates and political, had earlier described Mr Trump as a “three-time loser.”

Speaking at the DealBook summit in December, Mr Griffin said Trump’s victory posed an opportunity to end the “regulatory and litigation-induced paralysis” of the Biden era and “bring America back to a nation of principles, of strength, of prosperity and possibility,” according to Politico.



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