The U.S. foreign policy is undergoing a shift towards a more confrontational stance, especially with Trump's proposal for foreign taxation in the budget, creating uncertainty in the investment market. Chris Iggo, Chief Investment Officer at Amundi Asset Management, notes that international empathy and trust in the U.S. are declining, leading investors to prefer local market allocations as their risk awareness increases.

Since the beginning of the year, the trade-weighted dollar has dropped over 9%, while European stock markets have performed well, contrasting with weaker performances in U.S. and Greater China markets. However, the U.S. fundamentals have not completely weakened; corporate profit expectations remain in double-digit growth, driven by ongoing technological innovations such as artificial intelligence, and a loose domestic funding environment supports the U.S. stock market.

In the bond market, global bond performance is generally positive, but U.S. treasury and long-term bonds may be impacted by issuance pressures and yield fluctuations. Iggo believes that short-term and non-investment grade bonds can respond more flexibly to uncertainties. He emphasizes that investors face multiple challenges including policy risks, inflation pressures, and exchange rate volatility, and should maintain a balanced and diversified investment portfolio.

Despite the increased short-term market volatility, a long-term investment portfolio balancing yield-oriented credit assets with technology growth themes can enhance wealth appreciation potential.