Markets in Motion: Tariffs, Tech and Treasure

The Three Big Ideas Everyone’s Talking About

Over the past few weeks, I’ve been meeting with some of the sharpest investors across the globe. The conversations?

Disruptive ideas, market-moving insights, and scenarios that could shake up portfolios.

Three themes keep coming up, again and again:

1. Will Trump’s tariffs reshape global trade?
2. Is tech’s recent pullback a warning sign—or simply the next phase of the AI-driven super-cycle?
3. Could a U.S. gold revaluation unlock a $750 billion windfall?

These aren’t just theoretical debates. If any of them play out, the impact could be significant. Let’s dig in.

Trump Tariff Plan: A New Trade Playbook?

The U.S. has officially enacted 25% tariffs on imports from Mexico and Canada, triggering swift retaliation. Canada plans to impose equivalent tariffs on nearly $100 billion of U.S. goods, while Mexico is preparing its own countermeasures.

Meanwhile, the U.S. has also increased tariffs on Chinese imports, layering an additional 10% duty overnight. China responded by targeting U.S. agricultural products, introducing restrictions on American companies, and filing a complaint with the World Trade Organization.

Markets reacted sharply. U.S. equities dropped, gold rallied, and volatility spiked as investors assessed the fallout. Despite initial currency stability in Canada and Mexico, the broader concern is the economic impact. Businesses facing higher costs are expected to pass them to consumers, likely driving up prices on goods such as food and automobiles.

The key question remains: Are these tariffs a short-term pressure tactic or a long-term shift in trade policy? Either way, they are reshaping global supply chains, creating new risks and opportunities for investors.

AI’s Next Phase: Moving Beyond Infrastructure

Tech stocks have pulled back, but this isn’t the end of the AI rally—it’s the natural transition to the next phase of the AI-driven super-cycle.

AI adoption is rolling out in three stages:

• Phase 1: AI Arms Dealers – The infrastructure builders (chips, cloud, and compute power) fueled the first wave of returns.
• Phase 2: AI Power Users – Companies embedding AI into their operations, gaining efficiency, automation, and product advantages.
• Phase 3: AI for Everyone – Mass adoption drives broad-based productivity gains, benefiting companies across all sectors.

We are now transitioning from Phase 1 to Phase 2. AI is moving beyond hardware and into real-world applications, where businesses investing in AI will start separating from those that aren’t. The transition brings new winners, but AI’s role in reshaping the economy remains just as strong.

Gold Revaluation: A Thought Experiment

The idea of a U.S. gold revaluation is making the rounds, though it’s far from a base case. The U.S. Treasury holds 261.5 million ounces of gold but still values them at $42.22 per ounce—a relic from the early 1970s. With gold trading near $2,950 per ounce, that’s a multi-hundred-billion-dollar windfall sitting on the books.

A revaluation would allow the Treasury to boost its balance sheet without printing new money or issuing debt. There’s precedent:

• 1934 – The Gold Reserve Act: FDR raised gold’s price to strengthen the Treasury’s war chest.
• 1971 – Nixon Ends the Gold Standard: Cutting dollar convertibility enabled massive monetary expansion.

If it happens, expect:

• Gold prices to surge in anticipation.
• A weaker dollar if markets see it as monetary expansion.
• Big upside for gold miners and hard assets.

Again, this isn’t our base case, but given the debt backdrop, it’s worth watching.

Market Review

Equities: Rotation in Full Swing

The shifts in market leadership are real and accelerating:

• Tech is adjusting as AI moves into its next phase.
• Traditional economy sectors—energy, materials, real estate, and healthcare—are seeing inflows.
• Markets are adjusting to policy-driven headwinds—trade, inflation, and fiscal concerns.

Fixed Income: Volatility Returns Bonds have had a wild ride, and the narrative is shifting fast:

• The 10-Year Treasury yield dropped from 4.79% to 4.2%, reflecting recession fears.
• Inflation data came in hotter than expected, forcing a higher-for-longer stance on rates.
• Now, growth concerns have the market asking for rate cuts. Now is not the time to take excess risk. Credit spreads are tight, but if volatility spikes, they could widen fast.

Real Assets: The Bull Market Marches

The bull market in real assets is alive and well, fueled by:

• Persistent inflation.
• Geopolitical chaos.
• Tighter supply chains. Gold and gold equities are leading the way, followed by commodities, natural resource equities, and REITs.

Digital Assets: Bitcoin’s Wild Ride

Bitcoin hit $107K before falling back below $80K—a classic high-volatility shakeout.

• Bitcoin is trading like a risk asset, moving with big tech.
• Will it go lower? Probably.
• Will we buy more if it does? Absolutely. Timing bottoms is impossible. The real question: If I buy today, will I look smart in 6, 12, or 18 months? We think the answer is yes.

Final Thought

Market risk is elevated, and with rotation underway, this is a time for broad diversification—across asset classes, within asset classes, and with exposure to traditional risk-off assets like Treasuries and gold—not a time for taking outsized risks.