Trump trades soar on signs president recognizes economic, political risks
It’s been a while since we checked in on the Trump trades that surged in the aftermath of President Donald Trump’s election victory last year.
Shares of these diverse groups of stocks (and crypto) — seen as likely to outperform thanks to Trumpist policy shifts, favorable regulatory treatment, and perhaps murkier benefits owing to cozy personal or political connections — romped Wednesday, as Trump seemed to soften his stance on tariffs and dumping the head of the Fed, policies that spooked global markets over the last couple months.
Palantir, the large US government contractor whose cofounder and largest shareholder is Republican mega-donor and sometime Trump adviser Peter Thiel, is one of the largest contributors to the S&P 500’s gain.
Trump Media & Technology Group, the money-losing parent of Trump’s personal Truth Social media site, is up nearly 12%.
Tesla, Trump ally Elon Musk’s battered electric vehicle company, is also up big, despite an ugly earnings report yesterday.
Axon, maker of tasers, body cams, and other products for security services, thought to be a beneficiary of the White House push for mass deportations, is having its best day since April 9, when Trump announced a temporary pause to his tariff policies. Private prison and ICE contractor GEO Group has had a more muted gain.
Bitcoin’s, which seemed to get the news slightly ahead of the stock market, is basically flat today, though it posted its biggest gain since April 9 yesterday.
As you can see from the chart above, some of these assets are now above water for the first time since Trump began what’s widely seen as an economically — and, if you look at his approval numbers on the economy, politically — disastrous month and a half tariff rampage that pitted him head-to-head with financial markets.
It’s hard to say exactly what’s going on. For sure, if backing away from tariffs reduces the risk of recession, and leaving Powell at the Fed reduces long-term interest rates, that would be good for most companies. And it has been today. (At last glance, more than 483 companies in the S&P 500 are in the green.)
But with the second- and third-biggest gainers in the index, Palantir and Tesla, there’s a distinctly Trumpy vibe to the market.
Of course, these companies aren’t just Trump trades. You could put them in any other number of buckets: high-beta momentum trades, AI trades, meme stocks, retail favorites, large-cap tech, and on and on.
But it stands to reason that if you’re betting these stocks will do well by basking in the bronzed glow of President Trump, any shift to shore up a political position weakened by the last couple months of tariff war would be a good thing. At least, that’s how I read it.
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