In the United States, the so-called Trump Trade has faced significant challenges, particularly since May 2026. The Trump Trade Index, compiled by Ned Davis Research, which includes a selection of exchange-traded funds (ETFs) expected to benefit from policies related to homebuilding, defense spending, and manufacturing re-shoring, has seen a decline of approximately 16%. This downturn follows a period of strong performance at the beginning of the year, where many of these investments posted double-digit gains. However, the ongoing conflict with Iran has had a detrimental impact on the economy, leading to increased energy prices, inflation expectations, and rising interest rates. These factors have collectively contributed to the weakening of the Trump Trade. Analysts, including Pat Tschosik from Ned Davis Research, have pointed out that the current economic climate is heavily influenced by the Iran war and its associated inflationary pressures. The situation has raised concerns about the sustainability of the stock market, especially as investors grapple with the potential for further supply chain disruptions and tariff implications. Fund flows indicate a trend of investors withdrawing from certain trades, with the Truth Social God Bless America ETF experiencing consistent outflows since the onset of the conflict. This ETF, which focuses on sectors like energy, industrials, and financials, has dropped over 4% this year, contrasting with the S&P 500's 8% increase. Despite the challenges, some investors remain optimistic about the long-term potential of Trump’s policies, suggesting that the current downturn may be temporary. They argue that manufacturing facilities and other investments take time to yield results, and thus, abandoning the Trump Trade now could be premature. The Point Bridge America First ETF, for instance, has performed better than the broader market during the initial stages of the Iran conflict, indicating that not all Trump-related investments are suffering equally. As the situation evolves, analysts caution that the stock market's resilience may be tested further, particularly if inflation and oil prices continue to rise.