MW This Trump trade returned 29% in six months - but its authors say it's time for a big change.
By Jamie Chisholm
Miners and rare earth plays boosted gains for a strategy devised by Ned Davis Research
It's a thumbs up for the Trump Trade over the last six months
U.S. President Donald Trump has been a constant market catalyst, with trade policy, geopolitical actions and fiscal plans regularly shifting asset prices.
The latest market driver is his mooted imminent selection of a new Federal Reserve boss, which has lifted the dollar, hit bond prices and whacked precious metals.
Little wonder then, that analysts and investors strive to develop strategies that exploit the president's announced and expected plans. Collectively, and in various forms, these are known as Trump Trades.
And for some, they have worked pretty well. The 2025 Trump Trade Index, an equal-weighted gathering of exchange traded funds created by Ned Davis Research is up 28.7% since a team led by chief thematic strategist Pat Tschosick gave an update in July.
Much of the gains have come from big rises for the VanEck Rare Earth & Strategic Metals ETF REMX and the State Street SPDR S&P Metals & Mining ETF XME.
The Ned Davis team say these gains reflect Trump's trade war, where tariffs are used as ammunition, and which has triggered a two-pronged reaction.
"First, precious and industrial metals have been sought out as a safe-haven over the U.S. dollar and U.S. Treasuries. Second, supply concerns of rare earth and industrial metals that the U.S. does not have in abundance are likely contributing to speculative price gains," they say.
Other exchange traded funds in the 2025 Trump Trade Index include the Global X Defense Tech ETF SHLD, which benefited from Trump's wish to boost the U.S. military budget; the iShares U.S. Oil & Gas Exploration & Production ETF IEO, which was lifted by Trump's preference for fossil fuels; and the Global X Uranium ETF URA, which was boosted by an easier regulatory backdrop for nuclear energy to help power data-centers.
But the Ned Davis team think it's time for a change. They have decided to drop the iShares Bitcoin Trust ETF IBIT and the ARK Fintech Innovation ETF ARKF.
"Crypto seems to have taken a lower priority for the administration and the CLARITY Act, which should clarify federal regulation authority for digital assets, has stalled in the Senate," they explain.
And now they are looking ahead to the U.S. mid-term elections. Their colleague Ed Clissold has produced the Big MAC (Midterms Are Coming) index, a list of trades designed to benefit as the Trump administration takes action to gain favor with voters, with a focus on affordability, defense and economic growth.
Some of these factors will now be added to the new 2026 Trump Trade index. They include the State Street Industrial Select Sector SPDR ETF XLI, because they say it's the sector most tied to economic growth; and the Invesco DB US Dollar Index Bearish Fund UDN, because they reckon real interest rate differentials and potential yen intervention should drag the dollar lower.
Then there's the iShares U.S. Home Construction ETF ITB, which may benefit the administration's drive to improve home-buying affordability.
Also added to the Trump Trade Index for 2026, which the team says partly reflects a lack of trust in the U.S., is the ProShares Short 20+ Year Treasury TBF.
"If you can freeze, sanction, and use a country's asset as leverage against them, it [a Treasury] is no longer a risk-free asset and needs to be repriced. If longer-term Treasuries carry inflation risk, volatility risk, and now geopolitical risk, it creates an incentive to reduce duration to reduce risk," they say.
Source: Ned Davis Research
However, arguably Ned Davis's biggest call is to drop from the 2026 Trump Trade Index the Roundhill Magnificent Seven ETF, which contains Alphabet $(GOOGL)$, Amazon.com (AMZN), Apple $(AAPL)$, Meta Platforms (META), Microsoft $(MSFT)$, Nvidia (NVDA) and Tesla $(TSLA)$.
"We fear we are passing peak growth for datacenter-related sales (specifically semiconductors) and the Trump administration has been less friendly toward Big Tech saying they should 'pay their own way' for the electricity they consume," they say.
The markets
U.S. stock-index futures (ES00) (YM00) (NQ00) are lower as benchmark Treasury yields BX:TMUBMUSD10Y rise. The dollar index DXY is higher, while oil prices (CL.1) slide. Gold (GC00) and silver (SI00) futures are plunging as the dollar debasement trade fades.
Key asset performance Last 5d 1m YTD 1y S&P 500 6969.01 0.81% 1.80% 1.80% 14.79% Nasdaq Composite 23,685.12 1.06% 1.91% 1.91% 20.34% 10-year Treasury 4.26 2.70 6.50 8.80 -28.10 Gold 5105.9 2.46% 17.59% 17.86% 80.32% Oil 64.54 5.29% 12.58% 12.42% -12.56% Data: MarketWatch. Treasury yields change expressed in basis points
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The buzz
U.S. economic data due Friday include the December producer prices report, released at 8:30 a.m. Eastern.
President Donald Trump is expected to announce on Friday that he has nominated Kevin Warsh as next chair of the Federal Reserve.
Fed officials making comments include governor Stephen Miran appearing on CNBC at 11:10 a.m. and on Bloomberg at 3 p.m., and St Louis Fed President Alberto Musalem talking at 1:30 p.m.
Apple stock (AAPL) is a touch lower even after the company revealed that surging iPhone sales powered a record quarter of revenues.
Tesla shares (TSLA) are higher on reports Elon Musk may merge SpaceX with his car and robotics company.
Sandisk shares $(SNDK)$, which are already up 127% this year and 1,400% over the last 12 months, are jumping further after better-than-expected earnings.
Companies reporting earnings on Friday include American Express $(AXP)$, Chevron $(CVX)$, Exxon Mobil (XOM) and Verizon Communications $(VZ)$.
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The chart
Microsoft's 10% dive on Thursday, following poorly-received results, contributed to a bad day for the software sector. How bad? Very. In fact, the S&P 500 Software & Services sector underperformed the S&P 500 by 7.89%, according to Bespoke Investment. Microsoft (MSFT) and other big software companies such as Oracle $(ORCL)$ and Salesforce (CRM), means the industry accounts for about a tenth of total S&P 500 weighting. "As a result, this group usually moves in the same direction as the rest of the market, especially in the past couple of decades," says Bespoke. "Today [Thursday] marks a historic disconnect though."
Top tickers
Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern.
Ticker Security name TSLA Tesla NVDA Nvidia AAPL Apple GME GameStop MSFT Microsoft META Meta Platforms MU Micron Technology SNDK Sandisk TSM Taiwan Semiconductor Manufacturing PLTR Palantir Technologies
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-Jamie Chisholm
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January 30, 2026 06:38 ET (11:38 GMT)
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