The public is concerned about Trump’s policy priorities

An AP‑NORC poll of 1,203 U.S. adults conducted Jan. 8–11, 2026 finds public assessments of President Trump steady but negative: 30% rate him a good/great president, 17% average and 52% poor/terrible; roughly half say he’s focused on the wrong priorities. About half say the country and national economy are worse off since he took office, 57% say he has hurt the cost of living and 50% say he has hurt health care costs, while 40% say he has hurt job creation; 60% think he’s gone too far on tariffs and using presidential power and 50% say the same about deportations. These results signal elevated policy and political risk—notably on tariffs, regulatory action and immigration—that could sustain a defensive market posture and keep sectors sensitive to trade, consumer inflation and health-care costs under scrutiny.

Analysis

Market structure: Rising public opposition to current policy mix (tariffs, deportations, perceived cost-of-living harm) signals a durable tilt toward protectionism and domestic-sourcing over 6–36 months. Direct winners: U.S. domestic materials and capital-goods suppliers (steel: NUE, industrials: XLI), defense contractors (LMT, RTX) and automation/robotics vendors that substitute immigrant labor. Losers: import-reliant retail and consumer discretionary (XRT, AMZN exposure), agricultural exporters (ADM) facing retaliatory barriers and margin squeeze from higher input prices.

Risk assessment: Tail risks include an escalatory trade war causing a >2% U.S. GDP hit (12–24 months) or broad retaliatory tariffs that push CPI >0.5% monthly, forcing Fed policy repricing. Near-term (days–weeks) the dominant risk is policy headline volatility; short-term (1–6 months) is margin compression for importers; long-term (1–3 years) is structural reshoring boosting capex for fabs and factories. Hidden dependencies: labor-market tightness from tougher immigration enforcement will accelerate automation demand and wage inflation in agriculture/construction.

Trade implications: Implement low-cost exposure to beneficiaries and hedge macro risk: establish 1–3% long in NUE and 1–2% long LRCX/AMAT as plays on reshoring and CHIPS-style support over 6–18 months; add 1–2% long LMT/RTX for defense/border-security spend. Hedge equity-market tail risk with a 3-month put-spread on the SPX (buy 2.5% OTM put, sell 1% OTM put) sized to cap drawdown to ~1–2% of portfolio; short 1–2% of XRT or go short XLY vs long XLI as a pair trade reflecting consumer squeeze vs industrial capex.

Contrarian angles: Consensus assumes tariffs uniformly good for domestic producers; it's underestimating downstream margin pressure and potential import-substitution inefficiencies. If CPI moderates below 2.5% YoY or tariff implementation stalls in the next 90 days, cyclical longs (consumer, retail) will rebound—use 3–6 week options to play mean reversion. Historical parallels (1980s tariff spikes) show short-term domestic wins but multi-year productivity drag; prefer selective capex/automation exposure over broad commodity longs.

Key Decisions for Investors

• Establish a 2–3% long position in Nucor (NUE) sized to portfolio volatility as a direct beneficiary of tariffs/reshoring; add if a tariff affecting >5% of steel imports is announced (scale in 50% at announcement, 50% on implementation within 3–6 months).
• Initiate a 1–2% long position in Lam Research (LRCX) or AMAT to capture CHIPS/reshoring capex; increase to 3% if semiconductor capital expenditures guidance rises by >10% YoY in next two earnings cycles (next 6 months).
• Short 1–2% exposure to XRT or go -1% net to XLY (consumer discretionary ETF) funded by taking +1% in XLI (industrial ETF) as a pair trade reflecting demand compression for import-heavy retail vs industrial capex; close/trim if CPI monthly prints fall below 0.2% for two consecutive months.
• Buy a 3-month SPX downside hedge: purchase a 2.5% OTM put and sell a 1% OTM put (put spread) sized to limit portfolio drawdown to ~1–2%; widen hedges if VIX spikes >20 or a major tariff/retaliation headline occurs.
• Add a 1–2% long in Lockheed Martin (LMT) or RTX to capture border/security spending upside; scale up if Congress/Administration signals a formal 12–24 month increase in defense/border budgets exceeding current baseline by >5%.