The “Don’t Fight Trump” Trade Is Working: S&P 500 Ignores Everything and Keeps Surging

3 days ago 3

Omor Ibne Ehsan

Thu, May 21, 2026 astatine 8:08 AM CDT 5 min read

Quick Read

The SPDR S&P 500 ETF Trust (SPY) has climbed 30% since Election Day 2024, driven by ascendant AI, defense, and manufacturing names that are capturing a trillion-dollar information halfway and spot spending cycle, with margins holding dependable contempt elevated ostentation and geopolitical tensions.
The market’s continued spot rests connected the presumption that argumentation announcements seldom trigger lasting harm and that the AI gross ramp volition warrant guardant net multiples successful the precocious 20s to debased 40s, but positioning is extended crossed hedge funds and systematic strategies, leaving small antiaircraft cohort to sorb a drawdown if complaint cuts stall and capex pauses get simultaneously.
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The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) keeps rising much and more, nary substance however "bad" the quality gets. Since Election Day 2024, the scale is up 30%, a tally that has absorbed a shooting warfare with Iran, a tariff authorities that rewrites itself by tweet, and an ostentation people that refuses to behave. The bumper sticker version, fashionable connected trading desks from Greenwich to Greenwich Avenue, is "don't combat Trump." The honorable mentation is much interesting. The marketplace has decided that nary of the things keeping cablegram quality producers employed really substance to firm earnings, and truthful acold the marketplace has been right.

What the portion is really pricing

A astir 30% determination successful 18 months connected a $50-plus trillion scale ranks, successful dollar terms, arsenic 1 of the largest wealthiness instauration events successful American history, and it has happened portion the Consumer Price Index climbed from 315.493 successful November 2024 to 333.020 successful April 2026. Inflation has stayed elevated portion equities outran it. Equities, being claims connected nominal currency flows, bash good erstwhile prices rise, truthful agelong arsenic firm margins hold. And margins person held.

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Money marketplace balances stay parked adjacent grounds highs, the Treasury has been terming retired indebtedness astatine a measured pace, and the AI superior expenditure rhythm has pulled guardant thing similar a trillion dollars of information center, power, and spot spending into a two-year window.

That spending lands connected the income statements of a tiny fig of precise ample companies, which is wherefore the scale keeps grinding higher adjacent erstwhile the median banal does not. The breadth occupation is real, but it has been existent for the full move, and shorting constrictive enactment has historically been a accelerated mode to suffer wealth successful a bull marketplace driven by genuine net maturation astatine the apical of the index.

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