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Hello! This is MarketWatch reporter Isabel Wang, bringing you this week’s ETF Wrap. In this edition, we look at ETF winners from the so-called Trump trade, and whether that momentum has started to fade more than a week after Election Day.

Last week, Donald Trump’s stunning political comeback to the White House and a Republican sweep in Congress sparked knee-jerk rallies in the U.S. stock market and other risk assets.

But a little more than a week later, some of the postelection sugar rush has started to fade, as investors fret over how long the honeymoon will last amid concerns that WallStreet could be left with a richly valued stock market under an uncertain Trump policy regime.

To be sure, the Trump trade still dominates news headlines as the president-elect this week started building out his cabinet, driving movement in U.S. stocks, bitcoin, bonds and the dollar — but those assets’ price actions have become more subdued.

“Now investors are looking back and analyzing what the actual impact of the election is, and they make their time to redo their portfolios and calls with the right sectors and international allocations that they need,” said Troy Donohue, head of Americas portfolio trading at BTIG. “It’ll be some time before we see that momentum again, and it’ll be more spread out over the coming months.”

Investors are betting that Trump’s second term could strengthen the U.S. economy and corporate America by providing tax relief, hiking tariffs and cutting financial regulations. But some of his economic plans could lead to a rising fiscal deficit and a resurgence of inflation, which would harm the government-debt market and send interest rates higher again.

Here’s a look at some of the biggest winners in the ETF market and how they’ve performed since Election Day.

Small-cap ETFs

Exchange-traded funds tracking U.S. small-cap stocks were on a tear last week, with the iShares Russell 2000 ETF

up 8.8% to score its best week in over four years. The rally was driven by expectations that Trump’s proposal to cut taxes and bring supply chains back to the country will eventually boost domestically focused smaller firms.

But that rally has started to fade, with the IWM falling over 2.5% so far this week, while the Vanguard S&P Small-Cap 600 ETF has dropped over 2% in the same period, according to FactSet data.

Weighing on the small-cap momentum are surging Treasury yields, which often hurt smaller companies that are more reliant on borrowing. The yield on the 10-year Treasury note hovered around its four-month high this week, as traders weighed rising expectations for a 25-basis-point rate cut by the Federal Reserve in December against the potentially inflationary implications of the Trump administration.

“The bond market is telling you that Trump’s policies will be inflationary and you’re going to have tariffs, so the direction of the 10-year yield is going to be the indicator for how the small caps perform going forward,” said Cody Slach, Senior Managing Director at Gateway Group, in a phone interview.

But Jan Szilagyi, chief executive officer of Reflexivity, a market-research fi rm, said he wouldn’t “read too much” into small-cap stocks’ selloff this week.

“I think there’s a lot of noise when you have a presidency that hasn’t even begun yet. Now there’s profit-taking on small-cap stocks, so I do not believe that this [the selloff] is telling you much about the view change [on Trump’s future policies],” he told MarketWatch via phone on Thursday.

In the longer term, Szilagyi said rate-sensitive small caps are “still very likely” to benefit from a Trump administration that supports growth, as well as lower interest rates.

Big Tech and Tesla-related ETFs

Some other ETF beneficiaries of the Trump trade also faltered this week, most notably technology- and Tesla-related funds.

The Roundhill Magnificent Seven ETF— which holds Apple Inc., Microsoft Corp., Alphabet Inc., Amazon.com Inc., Nvidia Corp.,Meta Platforms Inc. and Tesla Inc.— has fallen nearly1% so far this week after logging a more than 8% advance last week, according to FactSetdata.

Leading the decline was Tesla’s stock, which has tumbled over 3% this week following a30% advance in the previous week thanks to Chief Executive Elon Musk’s close ties to Trump. On Thursday alone, shares of the EV maker fell 5.8% on heightened concerns the Trump administration is readying a plan to kill EV tax credits.

To be sure, expectations that Tesla will benefit from Trump being elected allows traders to amplify their bets in the short term, said Donohue of BTIG. The Direxion Daily TSLA Bull2X Shares ETF and the GraniteShares 2X Long TSLA Daily ETF each rallied over 60% last week, before giving back some of their gains this week, according to FactSet data.

ETF winners that are still gaining momentum

Then there’s the crypto rally, which hasn’t shown any signs of slowing down as bitcoin on Wednesday touched $93,000 for the first time ever.

Bitcoin-related ETFs were the top performers among the nearly 1,000 funds MarketWatch tracked over the past week. The Invesco Galaxy Bitcoin ETF and the Bitwise Bitcoin ETF Trust were each up nearly14% so far this week, according to FactSet data.

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