Trump's Initial Six-Month Presidency: How Portfolios Have Suffered Changes
Tech Sector Recovers Amidst Uncertainty
After a period of volatility caused by President Trump's tariff announcements and unpredictable trade policies, the tech sector has shown signs of recovery[2][3]. The S&P 500 Information Technology Sector Index, which suffered a significant loss between late February and early April, has since recovered all of those losses and more, trading at record highs[6].
However, the tech sector still faces challenges. A genuine concern for many tech companies, including AI chipmaker Nvidia, is the potential tariffs that Trump may apply to imported semiconductors[4]. This uncertainty, combined with concerns about slowing artificial intelligence spending, has kept some investors on edge[7].
Despite these concerns, the tech sector remains a dominant force in the market. Companies like Microsoft, Apple, and Amazon have continued to drive growth and innovation, contributing to the broader economic recovery[2].
National Debt Concerns Rise
The national debt is another area of concern. By 2025, it is expected to exceed $30 trillion, and by 2034, the annual interest costs on the national debt will exceed the annual budgets of both Medicare and the Department of Defense[8]. Elon Musk, the CEO of Tesla and SpaceX, has formed the America Party to protest the size of the U.S. national debt and deficit[9].
The White House's moves over the first six months of President Trump's second term have been unlike any other administration seen in a long time[10]. The passage of the "big beautiful bill" is the most significant accomplishment of Trump's second term to date, but it has attracted both supporters and critics on both sides of the aisle[11].
International Stocks Outperform U.S. Stocks
While the U.S. markets have underperformed their global counterparts during Trump's presidency, international stocks have outperformed U.S. stocks[12]. Between 2002 and 2007, international stocks outperformed U.S. stocks, with excess returns of up to 10 percentage points in May 2007. This could be the start of another five-year run[13].
Amy Arnott, Morningstar portfolio strategist, notes that over time, international stocks have gone through multiyear periods when they either outperform or underperform the United States, partly because of differences in economic growth, currency trends, and valuation shifts[14].
Europe Emerges as a Counterweight
Europe's increased credibility as a geopolitical and economic counterweight to the United States is partly due to coordinated policy support for Ukraine and moderate fiscal expansion focused on infrastructure, innovation, and health care[15]. This has helped to bolster investor confidence and could make European stocks an attractive option for investors looking to diversify their portfolios[16].
In summary, the tech sector has shown signs of recovery after a period of volatility caused by trade disruptions, but uncertainty remains due to concerns about slowing artificial intelligence spending and tariffs. The national debt is a growing concern, with the White House's moves over the first six months of President Trump's second term attracting both supporters and critics. International stocks have outperformed U.S. stocks during Trump's presidency, and Europe has emerged as a counterweight to the United States, making European stocks an attractive option for diversification.
Crypto and DeFi investments have gained traction in the face of general-news and political uncertainties surrounding the tech sector and national debt. For instance, some tech companies, such as Nvidia, are leaning towards Initial Coin Offerings (ICOs) to bypass tariff-related issues. Meanwhile, Elon Musk, the CEO of Tesla and SpaceX, has formed the America Party to protest the size of the U.S. national debt, demonstrating a link between politics and the rise of alternate investment opportunities like cryptocurrencies and DeFi platforms.
