Thoughts from Themes: Brash & Bullish

Markets Love a Maverick!

Six months into Donald Trump’s second term, the numbers are in—and markets are roaring. From Wall Street to the blockchain, investor confidence has surged on the back of Trump’s aggressive policy playbook: tariffs, tax incentives, deregulation, and a full-throttle push for U.S. energy and manufacturing dominance. While his governing style continues to spark debate, one thing is clear—America is back in the spotlight, and capital is following.

Trump’s Economic Jolt

In the first six months of Donald Trump’s second term, the U.S. economy has experienced a remarkable resurgence, with stocks, bonds, and cryptocurrencies riding a wave of optimism. Trump’s bold, brash approach to governance—marked by his signature tariff policies, a push to revive American manufacturing, and a relentless drive to boost energy production—has reinvigorated markets and positioned the U.S. as the world’s “hottest” economic hub. While his unapologetic style has sparked debate, the numbers tell a story of investor confidence, economic dynamism, and a recalibration of global trade that favors American interests.

The data doesn't lie. The stock market has been a standout beneficiary of Trump’s policies. The S&P 500 and Dow Jones Industrial Average have surged, with gains of approximately since January 2025. Trump’s pro-business rhetoric, coupled with swift deregulation in sectors like energy, technology, and finance, has unleashed corporate optimism. His administration’s tax cut extensions and incentives for repatriating corporate profits have fueled stock buybacks and capital investments, driving equity prices higher. Small-cap stocks, particularly in manufacturing and energy, have outperformed, buoyed by Trump’s “America First” agenda, which emphasizes domestic production. His pledge to bring manufacturing back to U.S. soil has resonated, with companies like General Motors and Intel announcing new U.S.-based facilities, creating jobs and boosting investor sentiment.

Trump’s tariff strategy has been a cornerstone of his economic vision, shaking up global trade dynamics. By imposing targeted tariffs on imports from China and other nations, he has pressured multinational corporations to relocate supply chains to the U.S. While critics warn of inflationary risks, the tariffs have so far galvanized domestic industries, particularly steel and semiconductors, which have seen stock prices rise. This aggressive trade stance has also strengthened the U.S. dollar, reinforcing America’s image as a premier investment destination. Investors, sensing a shift toward U.S. dominance in global markets, have poured capital into American equities, further fueling the rally.

The bond market, meanwhile, has experienced a more nuanced but equally positive response. Treasury yields have risen modestly, reflecting expectations of higher growth and inflation driven by Trump’s energy and manufacturing push. His administration’s focus

on energy independence—through expanded oil, gas, and renewable projects—has reduced reliance on foreign energy, stabilizing prices and boosting confidence in long-term economic growth. Corporate bonds, particularly in energy and industrial sectors, have seen strong demand as investors bet on Trump’s infrastructure initiatives. While rising

yields have pressured bond prices, the market remains resilient, supported by a robust economy and the Federal Reserve’s cautious approach to rate hikes.

Cryptocurrencies have also thrived under Trump’s watch, with Bitcoin hitting new all-time highs and Ethereum gaining.  Trump’s embrace of digital assets, including his push for a U.S.-based crypto regulatory framework, has legitimized the sector. His administration’s talks of a “strategic Bitcoin reserve” have sparked speculative fervor, drawing institutional investors into the market. This pro-crypto stance, combined with reduced regulatory uncertainty, has positioned the U.S. as a global leader in blockchain innovation, further boosting investor enthusiasm.

Beyond Trump’s policies, other factors have contributed to the market’s strength. Global demand for U.S. goods has risen, driven by a recovering world economy and a weaker yuan, making American exports more competitive. The Federal Reserve’s steady hand, maintaining a balanced approach to inflation, has provided a stable backdrop for growth. Additionally, consumer confidence has surged, fueled by rising wages and job creation in Trump’s prioritized sectors.

The Trump administration’s approach has led the US economy to be scrutinized and often criticized based on the high volatility caused by the administration’s negotiating tactics. However, in just six months, Trump’s brash style, tariff-driven trade policies, and focus on manufacturing and energy have transformed the U.S. into an economic powerhouse that has even driven European markets higher, simply based on investor faith in his vision and the thought that a rising tide will lift all boats. While challenges like inflation and global trade tensions remain, the markets are betting on Trump’s America as the place to be—and the numbers suggest they’re right.

Thoughts on Earnings Season:

ARM: Arm Holdings reported Q2 earnings on July 30 amid soaring demand for its energy-efficient chip designs, which now power servers for Amazon, Microsoft, and Google, and underpin AI efforts at Meta and Nvidia. The company has seen explosive growth in data center adoption—up 14x since 2021—as AI accelerates the shift away from traditional x86 architectures. Despite near-term uncertainty and no full-year guidance, analysts expect Q1 revenue of $1.06B and EPS of $0.35. With a 95% gross margin and a growing developer base, Arm is positioning itself as a foundational player in the future of computing.

HOOD: Robinhood reported Q2 earnings on July 30, with analysts expecting a 48% jump in EPS and 34% revenue growth—driven by booming equity and crypto trading. The stock has more than doubled this year, fueled by strong crypto tailwinds and ambitious expansion. Recent moves include the $179M acquisition of Canadian crypto firm WonderFi and the launch of tokenized U.S. stocks and ETFs in Europe. Robinhood is also building its own blockchain and rolling out crypto staking and perpetual futures. With regulatory clarity improving and innovation accelerating, Robinhood is positioning itself at the forefront of the next wave in digital finance.

AI Stocks to Watch:

PLTR: Reporting Q2 earnings on August 4, Palantir has become one of the most closely watched AI software stocks, thanks to rapid growth in its Artificial Intelligence Platform (AIP), which helps organizations deploy AI at scale. Last quarter, U.S. commercial revenue soared 71% year over year, and Wall Street expects another 39% top-line increase this quarter. The company already raised its full-year guidance in Q1, so any sign of plateauing could weigh on sentiment. Trading at nearly 100x forward sales and up more than 100% YTD, Palantir’s valuation leaves little room for disappointment. Forward guidance will be key to justifying its premium multiple and sustaining momentum.

AMD: Reporting Q2 earnings on August 5, Advanced Micro Devices (AMD) is emerging as a key challenger in the AI chip race, going head-to-head with Nvidia through its MI300 GPU lineup. In Q1, AMD’s data center revenue jumped 57% year over year, and investors are looking for continued strength in Q2, particularly after the U.S. lifted restrictions on AI chip exports to China. That policy reversal could offset the $1.5 billion hit previously expected from lost China sales. As a result, the earnings call could be pivotal in reshaping the market’s growth assumptions. AMD’s results will be a crucial read-through for broader AI chip demand ahead of Nvidia’s report.

CRM: Reporting earnings on August 27, Salesforce’s Agentforce platform is quietly gaining traction in the AI enterprise software space, with over 8,000 customers signed up last quarter—half of them paying users. Despite its AI momentum, Salesforce stock has lagged, down ~20% YTD, and trades at just 24x earnings—well below AI peers. A better-than-expected Q3, particularly with upside in Agentforce adoption or positive commentary on its AI/data cloud strategy, could reawaken investor interest. With rival ServiceNow raising guidance on strong AI-driven results, expectations for Salesforce may be understated. This earnings call offers a potential reset moment if the company can deliver AI-driven growth and a compelling outlook.

This Week’s Major US Economic Reports & Speakers

Tuesday, July 29

8:30 AM Advanced US trade balance in goods

8:30 AM Advanced retail inventories

8:30 AM Advanced wholesale inventories

9:00 AM S&P Case-Shiller home price index (20 cities)

10:00 AM Consumer confidence

10:00 AM Job openings

Wednesday, July 30

8:15 AM ADP Employment

8:30 AM GDP

8:30 AM GDP price index

10:00 AM Pending home sales

2:00 PM FOMC interest rate decision

2:30 PM Fed Chair Powell press conference

Thursday, July 31

8:30 AM Intiial jobless claims

8:30 AM Employment cost index

8:30 AM Personal income

8:30 AM Personal spending

8:30 AM PCE index

8:30 AM PCE year over year

8:30 AM Core PCE index

8:30 AM Core PCE year over year

9:45 AM Chicago Business Barometer (PMI)

Friday, August 1

8:30 AM US employment rate

8:30 AM US unemployment rate

8:30 AM US hourly wages

8:30 AM Hourly wages year over year

9:45 AM S&P final US manufacturing PMI

10:00 AM ISM manufacturing

10:00 AM Construction spending

10:00 AM Consumer sentiment (final)

TBA Auto sales

Disclosures:

All data sourced from Bloomberg as of July 27, 2025, unless otherwise cited.

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