Investors in the early days of Donald Trump’s second term thought they had identified the clearest winners from the president’s agenda, but more than halfway through his first year in office, the playbook has shifted.
Analysts at Ned Davis Research this week said they recently revised their Trump Trade Index — an index of investment themes they believe will benefit from Trump’s agenda.
The firm’s original Trump Trade Index included investment themes like space and reshoring, as well as bitcoin and Trump Media & Technology Group, the parent company of Trump’s social media network.
“When we created our initial Trump Trade index prior to the 2024 election, we had only a general idea of Trump’s agenda and key themes impacted,” strategists wrote in a report on Wednesday. “However, after reviewing 170 executive orders, the One Big Beautiful Bill Act (OBBBA), and an ever-changing foray into tariffs, we have a much better indication of agenda priorities.”
Markets have been surprised by how Trump’s policy agenda has shifted so far this year. US stocks soared after Trump secured his second term in office, before embarking on a wild roller coaster ride as Trump announced his worldwide tariff package and negotiations dragged into this summer.
Here’s an update on what investment themes investors should add to the Trump-era playbook.
Defense
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Thesis:
Trump signed a slew of executive orders supporting aerospace innovation and the drone, cybersecurity, and shipbuilding industries in the US.
The GOP tax and spending bill has also earmarked around $150 billion for overall defense spending, $29 billion to shipbuilding, and $170 billion for border enforcement. The bill also has a $24 billion budget to help build the Golden Dome, an ambitious defense system that aims to put American anti-missile weapons into space.
Factors like China’s military advancement and the ongoing conflict between Russia and Ukraine also raise the risk that the US could become more involved in geopolitical conflict, strategists suggested.
“While several themes look overbought, some are sure to have staying power over Trump’s term. Unfortunately, we believe Defense could have staying power,” the report said.
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Relevant ETFs: SHLD
Metals & Mining
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Thesis:
Trump has also signed executive orders supporting the copper and rare minerals industry in the US. Meanwhile, the Big Beautiful bill includes tax incentives that support energy exploration in the US, which could also boost the metals and mining industries.
The president has also proposed steep tariffs on key commodities, like steel, copper, and aluminum.
The metals and mining theme was on display already in the last week, when the Department of Defense announced a large stake in rare earth miner MP Materials. The stock surged on the news that the Pentagon would become the company’s largest shareholder as it tries to strengthen America’s position in a critical supply chain.
Traditional, Nuclear, and Hydrogen Energy
Associated Press
Thesis:
Energy was a cornerstone of Trump’s campaign, and the president quickly declared a National Energy Emergency at the start of his term.
“While Biden’s agenda promoted Clean Energy, Trump clearly favors Traditional Energy, evidenced by orders to tap Alaska resources, remove production barriers, and promote Coal,” strategists wrote.
Uranium and Hydrogen energy are also in focus, the strategists added, pointing to “massive datacenter electricity demands.”
Trump has also proposed various tariffs that could raise energy prices, like tariffs on Canadian and Venezuelan energy, a 7.5% tariff on Uranium, and a 10% tariff on hydrogen-related goods.
Bitcoin & Digital Assets
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Thesis:
Trump, who branded himself as the “crypto president” on the campaign trail, has made a series of pushes into digital assets this year.
Early in his second term, he signed an executive order that aimed to support the US’s dominance in digital finance, and another that established a strategic bitcoin reserve.
Lawmakers are also set to pass a slew of new crypto-related legislation this week, like the Senate’s landmark stablecoin bill, the CLARITY Act, and the Anti-CBDC Surveillance State Act.
Artificial Intelligence
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Thesis:
Trump’s executive orders and a handful of provisions in the One Big Beautiful Bill Act are aimed at bolstering AI development in the US, The GOP tax and spending bill includes a $250 million budget for AI-driven cyber defense, as well as tax incentives for chipmakers to build their tech in the US.
Trump also announced a $500 billion AI infrastructure project in January, which involves Softbank, OpenAI, and Oracle building more data centers in the US. This week, Trump announced another $90 billion in AI and energy investments at an event in Pennsylvania.
Relevant ETFs: MAGS