Ned Davis Research’s Trump Trade Index has declined approximately 16% since May 2026. The breakdown in the index is attributed to the U.S. conflict with Iran, which has increased energy prices, inflation expectations, interest rates, and the value of the U.S. dollar.

The conflict has led to the closure of the Strait of Hormuz, marking the first time since 2012 that the strategic waterway has been completely shut down. This disruption has pushed Brent crude prices above $100 a barrel, while the Iran conflict has also spread to the Red Sea.

Prior to the 2026 decline, the Trump Trade Index had shown a 12% gain year-to-date as of April 2026. The index consists of a dozen exchange-traded funds expected to benefit from White House policies on homebuilding, defense spending, and the re-shoring of manufacturing. Ned Davis Research introduced the benchmark in 2023.

"All this is tied to the Iran war and inflation," said Pat Tschosik, chief thematic strategist at Ned Davis Research. He asked, "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?"

The administration replaced the expired temporary 10% global tariff on goods entering the U.S. with targeted actions under Section 338 of the Tariff Act of 1930. As part of this shift, the U.S. imposed 50% tariffs on a range of Canadian products, including beer, wine, paper, and hockey sticks. TD Cowen analyst Chris Krueger wrote on July 20, 2026, that China and Europe are the next likely targets for additional targeted Section 338 tariffs.

Matt Gertken, chief geopolitical strategist at BCA Research Inc. stated that investors who bet on AI and against traditional cyclical sectors outperformed those who viewed Trump as a champion of U.S. manufacturing, heavy industry, and working-class consumption. Michael O’Rourke, chief market strategist at JonesTrading Institutional Services, said, "There’s always something — the Iran war, the tariffs. It’s to the point that investors are just shutting these policies out the best they can, because they really can’t handicap them."

The VanEck Rare Earth and Strategic Metals ETF, the Global X Uranium ETF, and the Global X Defense Tech ETF each gained at least 20% at various points in the first quarter of 2026. In contrast, the Truth Social God Bless America ETF, trading under the ticker YALL, has experienced consistent outflows every month since the Iran war began. The fund has dropped more than 4% in 2026. Trump Media & Technology Group Corp. stock is down 35% year-to-date as of July 25, 2026.

The Point Bridge America First ETF, trading under the ticker MAGA, has remained higher for the year as of July 25, 2026. Hal Lambert, founder of Point Bridge Capital, served on the inaugural committee for Donald Trump. He said, The Iran war is causing some concern around energy prices. It’s a long-term play. You don’t build a manufacturing facility overnight. Mark Malek, chief investment officer at Muriel Siebert, said, "Now is really not the time to be pressing this while inflation and oil prices are elevated and investors are concerned that the corporate margin expansion could slow. We have to be very, very careful right now." Malek stated that the stock market has rallied despite the Strait of Hormuz being shut as a result of the Iran war.

The S&P 500 Index has climbed approximately 8% in 2026. The India Flash Purchasing Managers Composite Index for July 2026 reached 54.3. Donald Trump has threatened to impose massive duties on generic drug imports into the U.S. starting in August 2028. The Trump Trade Index fell by 8% over a three-month period in 2020 during initial U.S.-Iran tensions.