The AI data-center expansion and higher corporate capex outlook are sustaining demand for industrials, lifting XLI valuations well above its long-run average. Key holdings like Caterpillar and GE Vernova have rallied, while defense names such as Lockheed Martin and RTX add momentum amid renewed spending. With a ~$8 trillion data-center spend forecast by 2030, XLI beneficiaries could stay supported as infrastructure and rural-grid projects scale.
Trump's tariffs may raise U.S. inflation up to 7.4% by 2026. Manufacturing sector, tracked by XLI, predicted to suffer under Trump's policies. Real GDP may drop by 2.8% to 9.7% by 2028 due to proposed changes. Study suggests mass deportations and tariff increases harm overall U.S. economy.
