Ned Davis Research's Trump Trade index has dropped 16% since May, the research firm said, attributing the decline to geopolitical tensions and rising interest rates.
What's behind the drop
The index, a basket of stocks that investors associate with the economic agenda of former President Donald Trump, has been under pressure for months. Ned Davis Research pointed to ongoing conflicts abroad and the Federal Reserve's rate hikes as the main drivers. The combination has rattled sectors that typically benefit from Trump-era policies, such as energy and financials.
How the index is built
Ned Davis Research created the Trump Trade index to track stocks that are sensitive to the policy priorities of the Trump administration. The index includes companies in industries like fossil fuels, banking, and manufacturing — areas that saw regulatory rollbacks and tax cuts during Trump's term. The 16% decline since May marks a sharp reversal from earlier gains.
The research firm has not released a specific forecast for the index's near-term performance. Investors are watching for the next Federal Reserve meeting and any shifts in global conflict zones that could affect the index's components.
