"Trump trade" suffers a heavy blow

"Trump trade" suffers a heavy blow

One year after Trump's return to the White House, the previously popular "Trump trades" are suffering heavy losses. Assets that were expected to outperform during his term, especially stocks and cryptocurrencies directly linked to Trump himself and his family, have already plunged sharply, causing some investors to incur heavy losses.

According to The Wall Street Journal, since Trump took office, shares of Trump Media & Technology Group (DJT), which runs his social platform "Truth Social," have crashed by 75%. Meme coins named after Trump and First Lady Melania have fallen by 86% and 99%, respectively, since inauguration day. Another crypto project involving the Trump family, a token called "World Liberty Financial," has dropped about 40% since its launch in September.

Assets directly associated with the President and his family have taken a heavy hit during the wave of sell-offs sweeping through the most expensive and speculative corners of the market. This sell-off has also affected risky assets ranging from Bitcoin to artificial intelligence favorite CoreWeave.

Initially, investors expected the Trump administration to bring deregulation, tax cuts, and support for cryptocurrency policies, driving relevant assets higher. However, as investors now shift their focus from his political prospects to the actual performance of these companies—as well as concerns over his global trade policies—previous optimistic expectations have been overturned.

The plunge in Trump-related assets comes as overall market speculation cools. Nick Giorgi, chief equity strategist at Alpine Macro, said, "This is a healthy correction after a wave of speculation," adding that portfolios tracking meme stocks, retail favorites, unprofitable tech firms, and momentum stocks have all been hit hard over the past month.

The cooling of speculative sentiment is not limited to Trump's business ventures. A basket of unprofitable tech stocks tracked by Goldman Sachs, after surging earlier this year, fell 21% from mid-October to November 21.

Trump Media & Technology Group is just one of the many meme stocks hit hard recently. According to FactSet, the company's price-to-sales ratio is as high as 1,240 times.

The market turnaround has caught some individual investors off guard. Last month, a user identifying as a “DJT holder” on Reddit's investment forum said he bought the stock at $46, but now the price is only $11.07. He asked: “When should I give up and move on?”

Mixed performance for macro trades

The broader "Trump trade" strategy presents a more complex picture.

Some sector trades have performed as anticipated: healthcare stocks are up, European defense stocks once soared, clean energy companies are struggling, while large Wall Street banks such as Goldman Sachs are doing well.

However, due to worries about economic slowdown and weaker credit conditions, regional banks have lagged, and the largest private prison stocks—after gains following the election—also slumped sharply in 2025.

In alternative assets, gold has emerged as a winner. As investors fret over the dollar’s future or seek a hedge against market volatility, large flows have gone into gold, pushing prices to repeated records this year. Gold is now trading near $4,200 per troy ounce, up nearly 60% year to date and not far from its historic high set in October.

Conversely, after a strong rally, Bitcoin has been hit by brutal selling since October, falling 30% in less than two months. The turmoil in the cryptocurrency market has also affected Trump's business ventures, which are deeply involved in the industry.

Bob Elliott, CEO of Unlimited Funds, said that although those concentrated in these crypto assets "are feeling immense pain, the macro impact appears quite small," suggesting limited systemic risk.

Markets focus on inflation and interest rate outlook

Looking ahead, investors' attention will turn to the Federal Reserve's preferred inflation gauge—the Personal Consumption Expenditures Price Index (PCE)—to be announced next week.

After recent comments from Fed officials, traders are generally betting that the central bank will cut rates at its December meeting. Expectations for lower rates are helping stabilize market sentiment.

Despite increased volatility in the S&P 500 Index this fall and cautious evaluations of some tech giants' valuations, the main index has shown resilience, rebounding from each sell-off and now standing less than 2% from its all-time high.

Additionally, amid geopolitical and economic growth uncertainty, shorting long-term U.S. Treasuries has remained a good bet, as deficit concerns keep yields elevated.

Meanwhile, the U.S. dollar has generally weakened, partly because markets fear that planned tax cuts and other policies will worsen deficit spending.

Risk warning and disclaimerThe market carries risk; invest with caution. This article does not constitute personal investment advice and does not take into account individual users’ specific investment goals, financial circumstances, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article suit their own situation. All investment decisions based on this article are at your own risk.