Stagflation Trade Emerges as Rare Winner in US Stock Market Rout
This article is for subscribers only.
There have been few winning strategies to seek refuge in as the stock rout sparked by President Donald Trump’s start-stop tariff war drags on for a third week. One, though, is soaring right now: a pair trade that bets on stocks that thrive in an economy sinking into stagflation.
A Goldman Sachs Group Inc. basket bets on strength in commodities and defensive sectors like health care, and is short on the consumer discretionary sector, semiconductors and unprofitable tech stocks. As of Tuesday, it’s the bank’s best-performing US long-short basket in 2025, up nearly 20% compared to the S&P 500 Index’s 5.3% decline.