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After winning the November election, Donald Trump was sworn in as the 47th president of the United States today. This marks the start of his second term and strengthen one of the most remarkable political comebacks in American history. The new administration is expected to bring a wave of policy shifts. Though tax cuts and deregulation will boost economic growth, tariffs and deportations will accelerate inflation.

On his first day, Donald Trump plans to sign more than 200 executive orders to redefine U.S. policies on border security, diversity programs and national identity. This monumental shift promises to reshape the landscape of American governance.

Quick Insight Into a Few Trump Policies or Promises

Deregulation and Energy Policies: A significant focus on deregulation, particularly in the energy sector, is anticipated. Trump plans to expand drilling and mining on public lands and dismantle environmental regulations, aiming to achieve energy independence. This approach could benefit traditional energy companies but may face opposition from environmental groups and sustainable investment advocates.

Tax Reforms: Trump's administration is expected to pursue further individual and corporate tax cuts, building upon the 2017 Tax Cuts and Jobs Act. While specific details are yet to be unveiled, such measures could stimulate economic growth and increase corporate profits. 

Cryptocurrencies: Trump has ushered in a new era of friendlier U.S. regulation for crypto. He vowed to make the United States “the crypto capital of the planet.” Trump nominated Paul Atkins as chair of the Securities and Exchange Commission, fulfilling his most important campaign promise to the crypto industry. Atkins was seen as a crypto-friendly pick for the position. Trump also plans to build a national Bitcoin reserve, signaling a strong policy interest in digital assets.

Artificial Intelligence (AI): Trump promised to ramp up AI programs. He recently announced a $20 billion investment to build data centers across the United States, backed by Emirati billionaire Hussain Sajwani, chairman of DAMAC Properties. This investment supports the rapid establishment of data centers critical for generative AI applications.

Space Exploration: This area is expected to see a shift under the Trump administration, with a stronger reliance on private industry. Trump is likely to favor SpaceX’s private launch vehicles over NASA’s Space Launch System (SLS) for Mars exploration. The SLS, which costs $4 billion per launch, has faced criticism for its high cost and inefficiency. These initiatives are set to reshape the aerospace investment landscape. 

Tariffs: Trump has vowed sweeping tariffs to prioritize American manufacturing. He plans to impose a 25% tariff on imports from Canada and Mexico, citing concerns over drug trafficking and illegal immigration. A 10% tariff on Chinese goods is also slated for Feb. 20, 2025. These measures aim to bolster domestic industries but might escalate trade tensions and disrupt global supply chains.

Deportations: Trump has pledged to launch "the largest deportation program in American history," beginning on day one. He is expected to declare a national border emergency and deploy the military to assist in securing the southern border, according to Fox News. Trump has also vowed to end the longstanding policy that prevents federal immigration authorities from conducting raids on churches and schools. Any mass deportation effort will likely face logistical hurdles, cost billions and trigger extensive legal challenges.

ETFs in Focus

Trump’s policies and promises are highly beneficial for some sectors. Let’s highlight some ETFs from different corners of the market that would be in focus under Trump’s presidency: 

Energy Select Sector SPDR (XLE - Free Report)

Energy Select Sector SPDR offers exposure to the broad energy space and follows the Energy Select Sector Index. It has gained 4.7% over the past three months.

First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report)

First Trust SkyBridge Crypto Industry and Digital Economy ETF is designed to provide exposure to companies that SkyBridge believes are driving cryptocurrency, crypto assets and digital economy-related innovation. SkyBridge identifies securities primarily via “bottom-up” research focused on finding companies leading in the crypto industry ecosystem. CRPT has surged 42.6% in the past three months.

iShares Bitcoin Trust (IBIT - Free Report)

iShares Bitcoin Trust seeks to reflect the performance of the price of Bitcoin. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. It has risen 49.6% over the past three months. 

Themes Generative Artificial Intelligence ETF (WISE - Free Report)

Themes Generative Artificial Intelligence ETF provides exposure to the most promising generative AI tech stocks. It seeks to track the Solactive Generative Artificial Intelligence Index, which identifies companies that derive their revenues from AI, Data Analytics & Big Data, Natural Language Processing, or Artificial Intelligence-Driven Services. WISE is up 18.6% in three months.

Simplify Interest Rate Hedge ETF (PFIX - Free Report) ) 

Simplify Interest Rate Hedge ETF is the first ETF providing a simple, direct and transparent interest rate hedge. It seeks to provide a hedge against a sharp increase in long-term interest rates and benefit from market stress when fixed-income volatility increases while providing the potential for income. Simplify Interest Rate Hedge ETF has climbed 23.3% over the past three months.

ARK Space Exploration & Innovation ETF (ARKX - Free Report)

ARK Space Exploration & Innovation ETF is an actively managed ETF that seeks to invest in domestic and foreign equity securities of companies that are engaged in the theme of space exploration and innovation. It has gained more than 21% in the three-month timeframe.

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