Unlocking Post-Trade Truce Profits: Sector Strategies and Fidelity’s Lead Signal

The U.S.-China trade truce, signed on May 12, 2025, has redefined the investment landscape by reducing tariffs from 145% to 30% and halting a looming trade embargo. This pause in hostilities has sparked a rally in equities and bond markets, with the S&P 500 surging 16% from April lows. But beyond the headline gains lies a deeper opportunity: sectors poised to capitalize on supply chain normalization, revived capital flows, and strategic reallocations by institutions like Fidelity Investments.

Fidelity’s Portfolio Shifts: A Blueprint for Institutional Confidence

Fidelity’s Q2 2025 strategy reveals a clear tilt toward sectors benefiting from the truce’s reduced trade barriers and policy tailwinds. The firm’s $480 billion in equity assets under management now emphasizes:
- Reshored manufacturing: Fidelity’s industrials portfolio has boosted stakes in United Rentals (+2.55%) and Trane Technologies (+2.89%), capitalizing on U.S. infrastructure projects and domestic production incentives.
- Aerospace and defense: Positions in GE Aerospace and TransDigm Group reflect demand for aftermarket parts amid an aging global aircraft fleet.
- Tech resilience: While Fidelity trimmed U.S. tech exposure, it highlighted NVIDIA (+6.7% post-truce) and Marvell Technology as beneficiaries of reduced component tariffs.

The message is clear: institutional investors are betting on sectors with direct exposure to trade normalization and U.S. policy support.

Sector Deep Dive: Where to Deploy Capital Now

1. Industrials: The Reshoring Boom

The truce’s reduction of tariffs on Chinese imports has reignited reshoring efforts, driven by the Inflation Reduction Act and CHIPS Act. Key plays include:
- United Rentals (): Leverages rising construction demand for equipment rentals.
- Deere & Co. (): Benefits from China’s renewed demand for agricultural machinery.
- Eaton Corporation: Positioned to supply electrical infrastructure for grid modernization projects.

Why now? The 90-day tariff pause has stabilized supply chains, reducing costs for manufacturers reliant on Chinese parts.

2. Technology: Tariff Relief and Global Supply Chain Gains

While geopolitical risks linger, the truce has eased pressure on tech giants:
- NVIDIA (): GPU demand surges as lower tariffs reduce production costs for AI chips.
- Apple (): 90% of iPhones are still made in China—reduced tariffs stabilize margins.
- Semiconductor ETFs (e.g., SOXX): Post-truce gains reflect revived chip demand from automakers and data centers.

Caveat: U.S. export bans on advanced AI chips (e.g., NVIDIA’s H20) to China remain a risk.

3. Materials: Metals and Lithium on the Move

Supply chain normalization has supercharged demand for industrial commodities:
- Lithium (): Tariff relief boosted prices by 2.4%, benefiting miners like Albemarle.
- Zinc (): Used in construction and autos, zinc prices rose 1.8% as trade flows ease.
- Steel: U.S. producers like Nucor benefit from reduced Chinese import tariffs, stabilizing domestic demand.

Tactical Investment Framework

To capitalize on the truce’s long-term implications, adopt this three-step strategy:

1. Sector Rotation:
2. Overweight: Industrials (+5%), Tech (+3%) focused on reshoring and semiconductors.

3. Underweight: Consumer discretionary (-3%) as tariffs on luxury goods remain elevated.

4. Geographic Diversification:

5. Pair U.S. exposure with European industrials (e.g., Siemens) and Chinese tech (e.g., Tencent) to hedge against trade volatility.

6. Optionality:

7. Use call options on Fidelity’s top holdings (e.g., UNITE, NVDA) to profit from upside while limiting risk.

Conclusion: Act Now to Seize the Truce Dividend

The U.S.-China trade truce isn’t just a pause—it’s a catalyst for sector-specific growth. Fidelity’s portfolio shifts underscore the strategic advantage of investing in reshored manufacturing, tech resilience, and materials recovery. With global supply chains stabilizing and U.S. policy backing these sectors, now is the time to deploy capital before consensus catches up.

Final Call to Action: Allocate 15-20% of your equity portfolio to reshoring-focused industrials and tech stocks with China exposure. The truce’s 90-day window is a countdown to long-term gains—don’t miss it.

Data sources: Fidelity Investments Q2 2025 reports, U.S. International Trade Commission, and Bloomberg market data.