Impacts of Portfolios in Trump's First Six Months of Presidency Revealed: 5 Key Points
In the world of global finance, there's been a whirlwind of activity in recent months. Let's take a closer look at how various factors are shaping the investment landscape.
Amy Arnott, a Morningstar portfolio strategist, highlights an interesting pattern in international stocks. Over time, these markets have gone through multiyear periods where they either outperformed or underperformed the United States. For instance, between 2002 and 2007, international stocks outperformed U.S. stocks, with excess returns of up to 10 percentage points in May 2007.
Fast forward to the present day, and U.S. markets are currently underperforming their global counterparts. The Vanguard FTSE All-World ex-US ETF has soared more than 18% for the year to date, more than double the 7.4% gain for the Vanguard Total Stock Market ETF.
Meanwhile, the Trump administration's tariffs and trade policies have contributed to market volatility in 2025. However, despite these uncertainties, S&P 500 companies have shown remarkable resilience during the second quarter of 2025. Contrary to initial fears, the tariffs have not had a significant negative impact on their earnings. In fact, S&P 500 firms reported stronger-than-expected earnings, with aggregate profits rising 11% year-over-year.
The passage of the "big beautiful bill" has been a significant event in President Trump's second term. While the bill has supporters and critics on both sides of the aisle, it's worth noting that Elon Musk has formed the America Party to protest the size of the U.S. national debt and deficit, caused in part by the passage of this bill. The national debt is expected to exceed the annual budgets of both Medicare and the Department of Defense by 2034, potentially leading to higher interest rates and increased volatility in the long term.
On the geopolitical front, coordinated policy support for Ukraine and moderate fiscal expansion focused on infrastructure, innovation, and health care are increasing Europe's credibility as a geopolitical and economic counterweight to the United States. This shift could have significant implications for global markets in the coming years.
In the tech sector, concerns about slowing artificial intelligence (AI) spending and the release of a lower-cost AI model from China have impacted tech stocks earlier this year. However, the Trump administration's recent headway with China provides a silver lining for tech companies, as it has led to a slight relaxing of restrictions on some chip sales.
Looking ahead, investors should consider including global stocks in their portfolios, as the Trump administration continues its stop-and-start approach to trade. The odds of a U.S. recession, which were raised to 45% by Goldman Sachs in early April due to trade war concerns, have since lowered down to 20% according to prediction platform Polymarket.
As always, it's crucial for investors to stay informed and adapt their strategies to the ever-changing global market landscape.
Crypto and politics intertwined once again as Elon Musk, in protest against the U.S. national debt and deficit, which is expected to rise due to the "big beautiful bill," formed the America Party.
In the world of defi and ico, the geopolitical shift in Europe, with increased support for Ukraine and moderate fiscal expansion, could have significant implications in the future, impacting general-news headlines and investment decisions.
