For some time now, investor attention has been fixated solely on AI innovation and the high-flying tech giants of the Nasdaq. However, with market polarization reaching its peak, a single statement from President Donald Trump signals a massive shift in the underlying currents we may have overlooked. Following the Dow Jones Industrial Average’s breach of the 50,000 mark, Trump pledged to usher in the “era of Dow 100,000” during his next term.
What is particularly telling is his specific target: the Dow Jones, not the Nasdaq. This is not mere political rhetoric. It serves as a blueprint for “Trumponomics 2.0,” centered on America-first policies and domestic stimulus. It is a powerful preview of a macro strategy that dictates where the center of gravity in the investment world will shift next.
The Resurgence of ‘Main Street’ over ‘Wall Street’
Trump’s emphasis on the Dow reflects a clear intent to dominate the domestic economy and “Main Street” rather than just tech-driven growth. While the Nasdaq symbolizes the sheer capital power of Wall Street, the Dow and the Russell 2000 represent the actual landscapes where Americans work and consume.
Trump utilizes stock market performance as more than just an economic indicator; it is a political weapon against the opposition and a testament to his protectionist policies.
“Experts scoffed and said reaching Dow 50,000 by the end of my term would be a miracle. Yet, I achieved it today—three years ahead of schedule. Remember this during the midterms: the opposition will ruin the economy, and a vote for them is a vote for a market crash.”
These words suggest that Trump is monitoring market conditions in real-time and will deploy every policy tool available to boost indices directly tied to the real economy to secure his voter base.
The Delayed Return of the Quadrennial Manufacturing Cycle
From a macro perspective, the most critical indicator is the ISM Manufacturing Index. Historically, this index has bottomed out and rebounded in four-year cycles (2012, 2016, 2020, 2024). While 2024 should have been the pivot point, the fallout from high interest rates and inflation led to a “singular AI rally” from 2023 to 2025, where traditional macro indicators seemed broken.
The crucial observation for any strategist is here: the delayed manufacturing cycle is expected to realign with macro data and begin its move in earnest starting in 2026. This means the market, which has been flying on the single engine of AI, is about to engage its second engine: the recovery of the real economy. Cyclical and value stocks, long sidelined, are now primed to take center stage.
Logistics and Heavy Machinery: The Real Economy’s Weather Vane
The warmth of the real economy is first felt in the movement of logistics and heavy equipment. Here, we must read the time lag between international and domestic markets:
- FedEx: A barometer for global trade. It is already hitting new highs, benefiting from early interest rate cuts in Europe and Asia.
- UPS: A key indicator of U.S. domestic consumption. Its recent rebound is a decisive signal that the sentiment of American households and small businesses is finally reviving.
- Caterpillar: As a manufacturing heavyweight, it proves the strong downside support of the real economy, fueled by Trump’s domestic infrastructure revival policies.
Notably, as tax cuts boost real disposable income, e-commerce volumes for giants like Amazon are poised to surge. This directly drives the performance of companies like UPS, which operates a specialized domestic logistics network.
The Revenge of ‘Boring’ Stocks: Margin Maximization for Pepsi and Hershey
Consumer staples like PepsiCo and Hershey, which were dismissed over the past three years due to “GLP-1 (weight-loss drug) mania” and rising input costs, are now preparing for a spectacular turnaround. There are two key triggers:
- Activist Intervention: Elliott Management’s involvement in Pepsi has forced aggressive structural improvements—cost-cutting, plant closures, and pruning inefficient product lines—sharpening the company’s fundamental strength.
- The “Sticky Price” Margin Expansion:
- When raw materials like cocoa and sugar spiked, companies aggressively raised prices.
- As commodity prices now plummet due to stabilizing climate conditions, those hiked shelf prices remain unchanged.
- Consequently, these firms are entering a “sweet spot” where costs fall while selling prices hold steady, maximizing profit margins.
The Wealth Effect and the Virtuous Cycle of Spending
The reason Trump cannot afford a market crash is the Wealth Effect. He understands the psychological mechanism where a “green” brokerage account encourages actual consumer spending.
There is a market truism: “On days your account is bleeding, you eat instant noodles; on days it’s soaring, you look for the best restaurants in town.” A buoyant stock market is essential to revive consumer sentiment, which in turn fuels the Main Street economy Trump champions. With U.S. consumer confidence rebounding for three consecutive months, Trump will likely aim to keep the market in an intentional state of “overheating” to ensure both economic momentum and political victory.
Conclusion: Looking Beyond the Nasdaq to Global Macro
The market regime leading into 2026 will not rely on tech growth alone. Now is the time for an “open-minded” approach to your portfolio. We must broaden our horizon to include not only U.S. domestic plays but also the actual beneficiaries of a manufacturing resurgence: semiconductors and autos in Korea and Taiwan, commodity powerhouses like Brazil and Australia, and Japan, where further policy stimulus is expected.
A portfolio over-indexed on growth stocks faces the risk of being left behind in the unfolding macro environment. It is time to balance your holdings with Dow-based cyclical stocks and overlooked consumer staples.
Ask yourself: “Is your portfolio betting all its hope on the single, albeit glamorous, basket of AI?”
“I do not recommend buying or selling any stocks. My intention is simply to study together and share the trading strategies I personally consider. Please trade according to your own style, and as you continue your own research, I would appreciate it if you could also share any differing perspectives you may have. I hope we can grow together.”
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