Hedge Funds Frazzled by Tariff Chaos Weigh Sitting It Out (1)

A frenzy of hedge fund trading that has been a boon to investment banks may suddenly be nearing its limit, as big investors privately mull one of the dreaded phrases of Wall Street: the sidelines.

In Manhattan and beyond, some active traders are debating behind the scenes whether it’s time to throw in the towel on trying to predict President Donald Trump’s market jolts.

As one hedge fund manager, sleeping three hours a night, put it: There’s so much chaos and risk that any trade placed one day can blow up the next. The person asked not to be ...