What investors should be looking out for as the 'Sell America' trade loses steam

• What started out as a routine "Sell America" day ended with a fizzle.
• US stock indexes finished higher as investors shrugged off President Trump's latest attack on the Fed.
• Detailed below is what investors should be watching in the stock, bond, and currency markets.

Even by his own market-moving standards, President Trump has been on a real tear lately.

It's been just over a week since he sent oil stocks surging by imploring US drillers to invest in the revitalization of Venezuela.

And it's only been a few days since he stirred up volatility in defense stocks by first demanding they stop buybacks and dividends, then smoothing things over by pledging $1.5 trillion in military spending.

The Trump administration's latest major market disruption started on Sunday, on news the Justice Department had issued subpoenas to the Fed over a testimony from Jerome Powell on building renovations.

If there's one thing the market has shown in recent years, it's that it doesn't like any sort of challenge to Fed independence. The standard rebellious response to this, over time, has been the "Sell America" trade, which sees traders dump US stocks, Treasury bonds, and the dollar.

What transpired on Monday was hardly the most drastic "Sell America" event we've had (and we've had a few at this point). But it still sets high stakes for the three asset classes in question:

Stocks

What happened Monday

After an initial knee-jerk reaction sharply lower, major US indexes finished the day slightly higher. It was a more muted reaction than we've seen after past Fed attacks.

Perhaps investors are already invoking the TACO trade, and expecting Trump to "chicken out" and temper his stance. It's also possible that, at this point, they're simply used to Powell brushing off Trump and forging ahead. Plus he also only has four months left in his term.

What to look out for

A client note from the JPMorgan Securities trading desk stressed caution around stocks in the wake of the DOJ subpoenas. The firm said the latest threats make the Supreme Court's upcoming decision on Trump's ability to fire Fed Governor Lisa Cook even more important.

Treasury bonds

What happened Monday

The 10-year Treasury yield rose as much as 4 basis points on Monday before paring the increase. This is a common reaction under the "sell America" trade as investors dump US-denominated debt. Still, like with stocks, the reaction was minor.

What to look out for

Given the lack of reaction, attention is instead focused on last week's December jobs report. The data prompted JPMorgan's chief US economist to adjust his rate-cut forecast. He now expects zero cuts in 2026, and a rate hike in 2027.

If the "Sell America" narrative persists in any form — and if the market eventually agrees the Fed's rate-cut voyage is truly over — expect yields to rise again.

Dollar

What happened Monday

The dollar index — which assesses the greenback against a basket of foreign currencies — fell as much as 0.5% on Monday. Divesting from the dollar is a core element of the "Sell America" trade.

What to look out for

The dollar is fresh off being the worst-performing major currency of 2025. While a weak currency comes with some positives — like a nation's exports being worth more — it can also reflect a lack of faith in its financial system.