Some Wall Street veterans say appetite for the U.S. dollar is waning in ways not seen in years.

Why it matters: It could be the great unwind of the greenback binge of the past decade, when exposure to America was the world's safest — and a highly rewarding — investment. Now investors are hedging those bets.

What they're saying: "We're in a new era, where global investors no longer reflexively buy dollars or treasuries at the first sign of trouble," Jason Thomas, head of global research and investment strategy at Carlyle, tells Axios.

• Themos Fiotakis, a currency strategist at Barclays, puts it this way: "Since April, there's this trend that investors are trying to reduce the amount of dollar exposure. Some of that is a little bit of normalization, but there is a sense they need to go even deeper."

By the numbers: The U.S. dollar index is down more than 10% against a basket of other currencies this year, hitting a three-year low. The speed of the decline is the story.

• The dollar index peaked when President Trump was inaugurated. But it has since "fallen farther, faster than in any year since the U.S. abandoned fixed exchange rates," Karl Schamotta, a currency strategist at payments firm Corpay, tells Axios.

The intrigue: The drop is among the hints of some "America-proofing" underway.

• Bearishness on the U.S. dollar hit a 20-year high among global fund managers in May, according to Bank of America.

The big picture: Among investor turn-offs are Trump's volatile trade policy, stagflation fears, and exploding deficits.

• New on the list is a Wall Street Journal report that Trump may announce a new Federal Reserve chair this summer, well before Jerome Powell's term ends next year.
• If the pick is willing to push rates lower at Trump's whim, it would almost certainly strip America of its reputation as the global anchor of stability.

Threat level: The global economy runs on the U.S. dollar, but the chaos and uncertainty is reviving questions about how long (or whether) the reign will continue.

• "I have been getting a lot of inbound from clients about the euro as an alternative," Fiotakis says. While there is plenty of "anti-dollar" sentiment, no other currency has the might to replace it, he adds.

What to watch: Wall Street is still spooked by the "Liberation Day" aftermath, which showed investors flee U.S. assets, selling government bonds and dollars.

• "It is the sort of pattern you'd normally see in a stressed, emerging market," Adam Slater with Oxford Economics tells Axios, not the world's economic juggernaut.

The relentless decline of the dollar in recent months has one silver lining: fuel for the tech rally in the stock market.

Why it matters: A declining dollar can be considered bullish for U.S. stocks, as it provides an earnings boost for global companies when they convert their international revenue into dollars on financial statements.

• With tech and communication services now accounting for nearly half of the S&P 500's market cap, a rally in those sectors would almost certainly lift the broader index.

How it works: Take Apple, one member of the Magnificent 7 tech heavyweights, which get about 60% of their revenue outside the U.S.

• Say Apple sells an iPhone for €1,000 in Europe. The company will then convert this sale into U.S. dollars when it reports earnings.
• Today, €1 equals $1.17, so a €1,000 sale could convert to $1,170 in reported revenue. In this hypothetical, Apple didn't raise prices or sell more. It just benefits from a weaker dollar.

What they're saying: "People are really underestimating how good that weaker dollar is, particularly for tech," Max Kettner, the chief multiasset strategist at HSBC, tells Axios.

Yes, but: There's concern that an earnings beat driven by dollar weakness isn't real since it's not rooted in company fundamentals.

• Some investors question the earnings quality of growth from currency conversions, which can change, rather than underlying financials, like increased revenue.

What to watch: Earnings season kicks off again in a few weeks. Tech earnings expectations for Q2 mirror Q1, with growth expected to be essentially flat.

• Kettner says dollar weakness could yield an upside surprise in tech earnings that investors are missing now.
• "Equities are virtually at an all-time high, and all the short term positioning stuff from us is still sending buy signals," he says.
• "It's nuts…We've never had that."

Even while the stock market approaches an all-time high, there is a big dark cloud hovering over the economy: the housing market.

Why it matters: Home sales are hovering at historic lows, as economic uncertainty and high mortgage rates hold back buying.

By the numbers: Pending home sales — deals that are in contract but not yet closed — rose 1.8% in May over last month but are still at record lows, per data from the National Association of Realtors released yesterday.

• The only other time over the past 20 years that pending home sales have been this low was in 2020, when the pandemic briefly froze the real estate market.

Zoom in: Other indicators are also flashing terrible. Existing home sales fell year-over-year in May to their slowest pace since 2009 when the market was in tatters during the financial crisis, per the National Association of Realtors.

• Home prices are now rising at the slowest annual pace in two years, according to Case-Shiller data.
• Housing starts, or new homes beginning construction, dropped nearly 10% last month, the weakest in five years, a signal that home builders are losing confidence in the economy.

Zoom out: Even so, the news about a slight increase in pending sales cheered sad realtors, who've seen historically depressed home sales for a couple years now.

• "The bottom in home sales appears to be over with the possibility of a strong upswing once mortgage rates decline," NAR chief economist Lawrence Yun said in a statement, though he cautioned the market is seeing higher-than-normal cancellation rates and last-minute cold feet.

The big picture: There's not much to like in real estate right now, with news of immigration enforcement actions at home building sites, tariffs increasing the price of construction materials and, of course, weak demand in general.

• "It's less about mortgage rates, and more about economic uncertainty," says Eric Finnigan, vice president of demographics research at John Burns, the real estate consulting firm.
• Folks are particularly nervous about the job market.

Between the lines: As home builders contend with a freezing sales market, ICE is making things even more chilly. In a recent survey of home builders, conducted by Zonda, some companies reported the immigration enforcement agency is starting to visit job sites.

• The industry didn't comprehend how many negative hits housing would face from White House policies this year, says Ali Wolf, chief economist at Zonda.

The bottom line: "The housing industry is already riddled with challenges," Wolf says. "And I don't think we realized how many more we were going to face."