President Trump’s tariffs on top U.S. trading partners are set to take effect in coming days. Investors have been trying to pinpoint the potential winners and losers for weeks. 

They are ditching risky corners of the stock market for areas perceived as more insulated from Trump’s trade salvos. The S&P 500’s consumer-staples, healthcare and real-estate sectors, which are traditionally considered defensive, are up more than 5% this year and among the market’s best performers. The financials segment, which largely conducts business domestically, has risen 7.8%. All are outperforming the benchmark index, which has added 1.2%.

Meanwhile, some of Wall Street’s most popular trades have lost their shimmer. AI darling Nvidia’s stock tumbled 8.5% Thursday despite reporting another solid quarter. The Roundhill Magnificent Seven exchange-traded fund suffered a correction last week, a drop of more than 10% from its December high.

MicroStrategy, the bitcoin-buying machine whose popularity exploded following the election, has slumped 12% in 2025. And bitcoin was trading around $84,000 as of 4 p.m. ET Friday, down from around $105,000 on Inauguration Day.

Markets were jolted last week after Trump said tariffs on goods from Canada and Mexico, along with an additional 10% tariff on Chinese goods, would take effect Tuesday. He recently announced 25% levies on steel and aluminum and floated 25% tariffs on goods from the European Union.

Trump said he is also considering hefty tariffs on cars, semiconductors and pharmaceutical products.

Analysts fret that Trump’s militant trade policies could push inflation higher and test the economy’s strength. Just the uncertainty surrounding tariffs, regardless of their implementation, could continue rattling markets, they say. Lofty valuations and signs of froth are adding to worries that the market is vulnerable to a pullback.

“We’ve all got to keep our heads on a swivel,” said Joseph Amato, president at Neuberger Berman. “Things are coming fast and furious.”

Some money managers say they have already shuffled their holdings to brace for tariffs. David Waddell, chief executive of investment firm Waddell & Associates, says his firm added exposure to industrials and materials earlier this year, betting that the tariffs could lead companies to build manufacturing facilities in the U.S.

American companies, which in recent years were already under pressure to move their supply chains to the U.S., have stepped up their plans since Trump’s victory. Apple said last week that it will open a server-manufacturing site in Houston and double its Advanced Manufacturing Fund, which invests in U.S. manufacturing projects, to $10 billion. Drugmaker Eli Lilly said it would invest $27 billion toward building four new manufacturing plants in the U.S. 

Apple shares are down 3.4% this year, while Eli Lilly has climbed 19%.

“The Trump administration is basically enacting an industrial policy for the United States,” said Waddell. “Trump does have the levers and the tools to get it done.”

Trade-sensitive stocks across sectors have been hit hard. General Motors and Ford Motor shares have fallen 7.8% and 3.5%, respectively, this year. Shares of e.l.f. Beauty, which produces the bulk of its items in China, have tumbled 44%. Retail stocks including Abercrombie & Fitch, Deckers Outdoor, Five Below and Calvin Klein-owner PVH have also suffered double-digit percentage declines.

Bearishness among individual investors, measured by the percentage who expect stock prices to fall over the next six months, reached 60.6% for the week ended Wednesday, according to the latest American Association of Individual Investors survey. That level is the highest since September 2022, shortly before that year’s bear market bottomed.

Some companies are also taking a more somber outlook. U.S. grain merchant Archer Daniels Midland said last month that uncertainty surrounding trade policy could hurt profits this year. U.K. spirits maker Diageo scrapped its midterm sales outlook.

Meanwhile, economists worry that rising import costs could make inflation worse. Minutes from the Fed’s January meeting revealed that members believe tariffs could derail the central bank’s progress on taming prices. Data out Friday showed inflation moved closer to the Fed’s 2% target.

Crit Thomas, global market strategist at Touchstone Investments, says the firm reduced its exposure to international stocks the day after Trump’s victory, expecting that tariffs would hit foreign countries harder than they would the U.S. The firm more recently dialed down exposure to small-cap stocks, which tend to be more sensitive to changes in interest rates.

“Tariffs were a significant portion of Trump’s campaign, so it’s hard for me to see him really backing down,” Thomas said. “If they go through as being stated, I think that is going to create significant market volatility.”

Some investors say they are staying put for now, betting Trump’s trade-war threats are negotiating tools rather than actual trade policies. They also expect other parts of Trump’s agenda, including spending cuts and deregulation, to boost economic growth and help offset pain from his trade policies.

Investors also say strong corporate earnings growth, historically one of the biggest drivers of stock gains, should help keep the rally going. Companies in the S&P 500 have reported an 18% jump in fourth-quarter earnings this reporting season, according to FactSet. For 2025, analysts expect profits to climb about 12%.

Jack Janasiewicz, portfolio manager at Natixis Investment Managers Solutions, says he recently decreased his exposure to international stocks and cyclical sectors to take profits on areas that have seen big gains. He says he likely won’t make any portfolio changes owing to Trump’s tariff threats, unless they are actually implemented.

“We prefer to be reactionary as opposed to proactive,” said Janasiewicz.