Emerging markets' Trump rally at risk as tariff realities hit

The start of the second presidency of Donald Trump has matched his first term in proving a boon for emerging-market stocks, but the rally risks running out of steam given his trade and fiscal policies are also sinking corporate earnings.

- Bloomberg

The benchmark MSCI Emerging Markets Index has posted an advance each month from January through August, the first of his second term.

That's happened twice before in the 37 years that investors have tracked emerging markets as an asset class: in 2017, also a Trump inaugural year, and in 1993, under Bill Clinton.

But the Trump bump hides a fact that should worry investors in EM stocks, who've seen their wealth increase by $4.3 trillion so far this year: companies in developing nations are hurting. They've failed to meet expectations for profit in 2025, and, on average, are trailing projections for a 13th successive quarter. Earnings projections also began to fall, indicating the pain is set to deepen.