Caxton Associates has lost at least $600 million in market turmoil triggered by the Iran war, with its $9 billion Macro fund dropping 7 percent last week. The losses have pushed the fund down roughly 1 percent for the year, marking a setback for macro funds that profit from economic trend bets. The fund's chief executive, Andrew Law, had previously been optimistic about UK gilts, telling the Financial Times in November that borrowing costs could fall closer to other major economies.

Other prominent macro hedge funds have also suffered significant losses. Tudor Investment Corporation, run by Paul Tudor Jones, lost 1.8 percent last week but remains up 0.9 percent for the year. The market upheaval followed US and Israeli attacks on Iran, which all but closed the vital Strait of Hormuz to shipping and sent oil prices above $100 a barrel in highly volatile trading. Investors now bet that central banks will shelve interest rate cuts or even raise borrowing costs in response to the inflationary energy shock.

Caxton founder Bruce Kovner and Tudor Jones are among Wall Street's best-known macro traders, having made their names in the strategy's 1990s heyday. After a challenging period following the global financial crisis, macro funds had been enjoying a renaissance, with 2025 shaping up as their best year since at least 2008. However, funds in the sector have had to navigate elevated volatility triggered by both the US operation to remove Venezuelan leader Nicolás Maduro and now the war in Iran.