The Wrap: Equity Markets Slump, Bitcoin Fades & the Dollar Rebounds

In this week’s edition of “The Wrap,” we feature our view of the top events in Washington and on Wall Street over the past week. Don’t forget to watch “The Wrap with Chris Whalen” on The Julia LaRoche Show every Saturday on YouTube to catch our discussion of what’s hot and what’s not in the world of finance and investing. 

April 3, 2026 | The past week has been a decidedly volatile period, with spreads widening in response to growing concern about the US fiscal trainwreck ℅ the US Congress and President Donald Trump. Even the possible intervention of the Federal Reserve Board does not seem to impress a market about to see the largest IPO ever in Elon Musk’s SpaceX. This is a timely liquidity event for cash-poor Musk given the performance of Tesla (TSLA), which was off 5% in the past week and down 17% in the past six months.

As of early April 2026, bitcoin tokens are trading around $66,000–$67,000, experiencing a challenging start to the year with a notable decline from early 2026 highs, falling roughly 19% over the past 12 months. After breaking below $84K support in late January, the ersatz market has seen increased selling pressure as a growing number of whales head for the exit. The silence on Wall Street regarding all manner of coins is remarkable.

President Trump continued to punish the financial markets with his erratic and unpredictable behavior regarding the war with Iran, pushing oil to the highest levels since 2008 near $150 per barrel and stocks lower. U.S. stocks fell this week with major indexes suffering from intensified selling pressure due to rising oil prices and geopolitical tensions. The S&P 500 is down for the 10th consecutive week in a row.

The Nasdaq, S&P 500, and Dow all declined again this week, with the Nasdaq going deeper into a correction phase. As of early April 2026, in contrast, the U.S. dollar has experienced a notable rebound, gaining approximately 1.6% in the first quarter, marking its best performance since late 2024.

We keep thinking of Treasury Secretary Scott Bessent saying we’re nowhere near returning to QE, but the market reaction to the Iran war is decidedly negative. A shrinking spread (flattening curve) between the 2-year and 10-year Treasury yields indicates that investors are becoming less confident in future economic growth and expect lower interest rates or a recession. When short-term rates are rising toward (or exceeding) long-term rates, this often signals a future recession.

One big worry, ironically, comes from the nonbank mortgage sector, where one of the biggest buyers of residential mortgages -- United Wholesale Mortgage Corp (UWMC) -- is under growing criticism on several fronts following the failure of its acquisition of Two Harbors (TWO) last week. A remarkable post on LinkedIn this week alleges that the company is busted. We are impressed and also a bit worried that analysts will publicly challenge the famously litigious CEO, Mat Ishbia, in such a bold fashion.

Speaking of pump & dump, hedge fund mogul again Bill Ackman significantly boosted GSE stocks (Fannie Mae and Freddie Mac) in late March 2026 by publicly calling them “stupidly cheap” with 10X potential in a social media post. His comments reportedly sparked a 30% to over 50% surge in share prices on Monday, March 30, 2026, as investors reacted to his bullish outlook. Mortgage rates, meanwhile, are well above 6% and rising.

Of course there is zero evidence that either GSE is leaving conservatorship, but you never know with Trump. He just replaced Attorney General Pam Pondi after threatening to hit Iran “very hard,” sending the markets tanking. Bondi’s goose was cooked in the Jeffrey Epstein storm on Capitol Hill, but meanwhile new revelations about the business partners of this global pedophile continue to emerge. 

Gold and silver prices fell sharply this week, with gold dropping over 3% to roughly an ounce and silver plunging nearly 5-7% to April 2, 2026. News reports said the decline was driven by a surging US dollar, rising oil prices, and reduced expectations for interest rate cuts following intensified geopolitical conflict in Iran. 

While financial markets in the US and Europe have pushed gold and silver prices down from recent highs, a massive supply deficit in Asia for both metals is fueling bullish sentiment. In fact, a lot of selling in both precious metals and Treasury paper came from global investors raising cash. "Of course, these sales are interpreted as an erosion of confidence in the dollar-based system. So, here we go again…!" writes Alexandru-Stefan Goghie on Substack. He continues:

"This interpretation misreads both the reserve management and the structural role of Treasuries in the global financial system. What appears as “selling” is (or could) be better understood as liquidity mobilization under stress. And the key to understanding these flows lies in the interaction between global dollar funding needs and the pricing of energy."

As we noted in our interview with John Dizard this week (“Watch for Rationing of Oil, Gas & By-Products”) a number of nations and companies have a sudden need to raise substantial liquidity. As the  damage to oil, gas and chemical assets in the gulf grows, the cost of the war also surges. Dizard predicts shortages and even rationing of fuels and oil by-products due to Trump's war with Iran.

And finally in the big news this week, Italy failed to qualify for three straight World Cups, something no other World Cup winning nation has ever done. As co-hosts along with Canada and Mexico, the U.S. automatically qualified for the 48-team tournament, which runs from June 11 to July 19, 2026, with the final taking place at MetLife Stadium in New Jersey.

The Institutional Risk Analyst (ISSN 2692-1812) is published by Whalen Global Advisors LLC and is provided for general informational purposes only and is not intended for trading purposes or financial advice. By making use of The Institutional Risk Analyst web site and content, the recipient thereof acknowledges and agrees to our copyright and the matters set forth below in this disclaimer. Whalen Global Advisors LLC makes no representation or warranty (express or implied) regarding the adequacy, accuracy or completeness of any information in The Institutional Risk Analyst. Information contained herein is obtained from public and private sources deemed reliable. Any analysis or statements contained in The Institutional Risk Analyst are preliminary and are not intended to be complete, and such information is qualified in its entirety. Any opinions or estimates contained in The Institutional Risk Analyst represent the judgment of Whalen Global Advisors LLC at this time, and is subject to change without notice. The Institutional Risk Analyst is not an offer to sell, or a solicitation of an offer to buy, any securities or instruments named or described herein. The Institutional Risk Analyst is not intended to provide, and must not be relied on for, accounting, legal, regulatory, tax, business, financial or related advice or investment recommendations. Whalen Global Advisors LLC is not acting as fiduciary or advisor with respect to the information contained herein. You must consult with your own advisors as to the legal, regulatory, tax, business, financial, investment and other aspects of the subjects addressed in The Institutional Risk Analyst. Interested parties are advised to contact Whalen Global Advisors LLC for more information.