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Dollar slump magnifies stock market pain for foreign investors

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Dollar slump magnifies stock market pain for foreign investors

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European investors in US equities have been dealt a double blow as a slide in the dollar compounds losses on stocks, ending a “virtuous cycle” of share price and currency gains during Wall Street’s recent record run.

The slump in US stocks this year has confounded a widespread bet that Wall Street would continue to outperform. But an accompanying slide in the dollar has magnified the pain for foreign investors, ending a pattern where currency gains tended to offset some of the declines. 

The blue-chip S&P 500 is down 4 per cent in dollar terms so far this year, but nearly 9 per cent in euro terms. 

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This has reversed a self-reinforcing cycle whereby European investors piling into US stocks had helped to strengthen the dollar, improving the returns from unhedged stock bets and encouraging them to allocate more, analysts said.

The dollar has strengthened over the past couple of decades against its major peers, with the latest burst of strength at the end of last year.

“It’s sort of a virtuous cycle that you have had for a long time and now that is turning the other way,” said Peter Oppenheimer, chief global equity strategist at Goldman Sachs. 

“The US market has fallen more and because the dollar has fallen, when you translate that back, the impact is worse.”

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In the final quarter of 2024, investors drove US stocks to record highs on tech optimism and hopes for a boost to corporate profits from Donald Trump’s tax-cutting pledges. The S&P rose 2 per cent in dollar terms, but almost 10 per cent in euro terms.

But the dollar has dramatically reversed this year as investors upend their assumptions on the impact of Trump’s protectionist policies. Previously, investors had anticipated high trade tariffs would boost US inflation and hurt growth elsewhere, pushing the dollar upwards and the euro towards parity with the greenback.

Since mid-January, the dollar has weakened as investors fret over US economic growth while Europe’s promises on higher defence spending breed optimism on the continent.

Some detect a deeper shift in how dollar assets are perceived. The dollar has been widely viewed as a haven in times of stress, often strengthening when bad news hits global stocks. That has encouraged overseas investors to pile into Wall Street stocks without paying to hedge their currency risk, because the dollar acted as a shock absorber during a sell-off.

“The risk-reducing properties of unhedged dollar exposure have played a key part in portfolio allocation over the past decade”, said Deutsche Bank analyst George Saravelos, adding that this is “now changing”.

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This year’s US sell-off has led to similar losses for European investors as a much deeper Wall Street rout did in 2022, due to the shifting role of the dollar, he said.

If this “correlation breakdown” between equities and the dollar continues, European investors may think twice about loading up on US stocks without currency hedges, according to Saravelos.

Some are already shifting. Just over a fifth of European fund managers responding to a Bank of America survey this month said they were underweight US equities, the highest proportion since mid-2023.

A bigger European exodus could add to the pressure on US stocks, which tumbled into correction territory earlier this month.

“The downside risks to the S&P 500 as a result of foreigners selling are significant,” said Apollo chief economist Torsten Slok in a note this week, citing the overweight position that foreign investors had built up in US stocks.

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Former Olympian pleads not guilty in reflecting pool vandalism charges

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Former Olympian pleads not guilty in reflecting pool vandalism charges

Former U.S. Olympian David Hearn (left) walks with his attorney Norman Eisen to speak to reporters and protesters gathered after his arraignment at the Superior Court of the District of Columbia in Washington, D.C. on Thursday.

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Former U.S. Olympic canoeist David Hearn pleaded not guilty to damaging the Lincoln Memorial Reflecting Pool in D.C. Superior Court Thursday morning.

Federal prosecutors charged Hearn with a single count of destruction of property causing more than $1,000 in damage to the pool.

Hearn has previously claimed, which his attorneys repeated during a short press conference outside the court, that he simply touched the water in the pool out of curiosity.

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The Trump administration had just completed a $14 million renovation of the pool.

But shortly after the work finished, peeling paint and algae gathered in the water. The remodel has been largely criticized as a massive failure and waste of taxpayer dollars.

Superior Court Judge Carmen McLean released Hearn on his own recognizance. His next hearing is scheduled for Aug. 5.

Norm Eisen, one of Hearn’s attorneys, spoke to reporters outside of court following the hearing. He said the administration is using Hearn as a “scapegoat … for their own failures.”

“It is not a crime to touch the reflecting pool, to touch water in the United States of America,” he said.

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Prosecutors say there is a host of evidence against Hearn.

This is a developing story.

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Three more people charged with damaging Reflecting Pool after Trump’s multimillion-dollar restoration | CNN Politics

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Three more people charged with damaging Reflecting Pool after Trump’s multimillion-dollar restoration | CNN Politics

Three more people have been criminally charged with destruction of property at the Lincoln Memorial Reflecting Pool.

Officers say they detained Cameron Thiers, Sophie Dennison-Gibby and Justin Carreno one Saturday afternoon in June and described in court documents witnessing them peeling and removing pieces of blue paint from the Reflecting Pool.

One officer “witnessed Carreno reach down into the reflecting pool and pull up a piece of the blue paint,” according to the court documents.

The officer who detained Dennison-Gibby “found 1 additional piece of the reflecting pool liner” in her purse, the documents said.

All three incidents were recorded on the officers’ body worn cameras, they said in the court documents.

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Several “partnering law enforcement agencies assigned to the Reflecting Pool” working with US Park Police were involved in detaining the two men and one woman — including officers from Texas, Oklahoma, Montana and California.

One of the officers said in court documents that Thiers “admitted to removing a piece of blue sealant from the Reflecting Pool and still had it in his hand when I made contact with him.”

The three defendants were arraigned in court Wednesday and pleaded not guilty to the misdemeanor charges of destruction of property with a value less than $1,000. The judge ordered them to stay away from the Reflecting Pool.

Lawyers for Thiers and Dennison-Gibby declined to comment. CNN has reached out to Carreno’s attorney.

If found guilty of destruction of property, the defendants could be fined up to $1,000 and face a maximum of 180 days behind bars.

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The New York Times first reported that three additional people had been charged with damaging the Reflecting Pool.

President Donald Trump has repeatedly claimed that vandals caused major damage to the pool by gashing the lining after his administration spent more than $14 million on renovations, though he has not provided evidence to support that claim. The officers who charged Carreno, Thiers and Dennison-Gibby did not accuse them of gashing the lining.

Former Olympic canoeist David Hearn was indicted by a grand jury in Washington, DC, last week for allegedly damaging the Reflecting Pool. Hearn — unlike Carreno, Thiers and Dennison-Gibby – was charged with destruction of property with a value of more than $1,000 which carries a maximum penalty of 10 years in prison, if convicted. He is set to be arraigned in court Thursday.

Crews began draining the Reflecting Pool over the weekend to make repairs, according to Interior Secretary Doug Burgum, for the second time in three months.

The move comes after weeks of problems – algae blooms, green-hued water, a chipping bottom and the administration’s allegations of vandalism – that have plagued the iconic landmark, making its woes the subject of national interest.

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Supreme Court financial disclosures reveal how their books add to their income

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Supreme Court financial disclosures reveal how their books add to their income

Supreme Court Justice Amy Coney Barrett speaks at the Reagan Library on Sept. 9, 2025, in Simi Valley, Calif. Barrett discussed and signed copies of her new book, Listening to the Law: Reflections on the Court and Constitution.

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Even as the Supreme Court was handing down one legal thunderbolt after another last week, the justices were quietly releasing their annual financial reports. Justice Samuel Alito was the only sitting justice to request an extension, which he has done for 15 years. The disclosures do not give a complete account of the justices’ total income and wealth, but they give insights into their concertgoing, guest professorships and even their involvement in youth sports.

In addition to their salaries, much of the justices’ reported income came from their book deals. Justice Ketanji Brown Jackson led the pack earning more than $1.1 million last year for a total of roughly $4 million since her memoir, Lovely One, was published in 2024.

Justices Sonia Sotomayor, Neil Gorsuch, Amy Coney Barrett and retired Justice Anthony Kennedy also reported income from published books. Earnings from their books ranged from $849,000 for Barrett, to $300,000 for Gorsuch and $88,000 for Sotomayor, whose books include her 2013 autobiography and five children’s books. Justice Clarence Thomas, who previously earned $1.5 million for his 2007 memoir, listed no publisher payments last year, and Justice Brett Kavanaugh, one of 13 co-authors of a 2016 legal treatise, also received no payments last year. Kavanaugh is said to be working on a memoir but he listed no payments for the anticipated book. Alito does have a book coming out in the fall, but with his financial report still outstanding, there is no data on how much he was paid for the work in 2025.

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The only two sitting justices who have not written books are Chief Justice John Roberts and Justice Elena Kagan.

Many justices also earned income from teaching at law schools. Roberts reported income from New England Law, located in Boston, and Gorsuch reported teaching income from George Mason University in Virginia. Thomas taught classes at Catholic University in Washington, D.C., and Barrett and Kavanaugh taught at Notre Dame Law School. Barrett graduated from the school and began teaching there 23 years ago; Kavanaugh has family connections to Notre Dame.

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