Trump Trade Turns Sour Amid Iran Conflict

The 'Trump Trade' was once a hot investment strategy for those who believed in President Trump's economic policies. However, it has now slumped about 16% since May and is turning into a loser in the stock market.

According to Ned Davis Research, the breakdown of the trade is mostly due to the US conflict with Iran, which has pushed up energy prices, inflation expectations, interest rates, and the value of the US dollar.

'All this is tied to the Iran war and inflation,' said Pat Tschosik, chief thematic strategist at Ned Davis Research. 'Let's just go three months without some sort of inflation shock, right? Between some sort of tariff, or war, or supply chain disruption, could we just go three months without some sort of supply shock?'

Several ETFs in the gauge are now trading lower for the year, including the VanEck Rare Earth and Strategic Metals ETF, the Global X Uranium ETF, and the Global X Defense Tech ETF.