Trump's Davos Energy Pitch Fuels Traditional Energy, Nuclear, Pressures Clean Energy ETFs

President Donald Trump's speech at the World Economic Forum in Davos on Wednesday injected fresh volatility into energy markets, with investors parsing his sharp critique of renewables, renewed embrace of fossil fuels and a surprise endorsement of nuclear power. The rhetoric, delivered against a backdrop of heated geopolitical commentary, is already echoing through the ETF market.

A Policy Pivot With Market Impact

Trump used his Davos platform to underscore U.S. support for expanded nuclear energy, a marked evolution from past skepticism, while dismissing wind and solar as costly and unreliable. He suggested streamlined approvals for new nuclear capacity, tying it to the growing electricity demands of AI and data center expansion.

The immediate market effect was visible in nuclear energy equities and thematic ETFs, with traders betting that government backing could drive faster growth in the sector. Early pricing action and sector flows suggest investors are repositioning portfolios to reflect the changing policy landscape.

Nuclear ETFs Grab the Spotlight

Nuclear-focused ETFs have become a focal point for investors looking to capture the potential upside from renewed political support and structural demand drivers.

One of the more prominent vehicles is the VanEck Uranium and Nuclear Technologies ETF (NYSE:NLR), which offers diversified exposure across uranium miners, reactor developers and related infrastructure companies. This fund is a strategic play on the broader nuclear revival, holding names across the fuel cycle and power generation segments. The fund is up 3% on Wednesday.

Another vehicle gaining attention is the Global X Uranium ETF (NYSE:URA), which targets uranium producers and facilities central to the nuclear energy supply chain. Market trends have pointed to accelerating interest in uranium as a thematic trend, even before the Davos address. URA gained $76 million in inflows on Tuesday, according to data collected by ETFdb. The fund was up 3.2% on Wednesday.

Why nuclear matters now:

• Nuclear power provides carbon-free baseline generation, appealing to investors seeking low-carbon energy without sacrificing reliability
• Rising AI and data center demand is intensifying and calls for dependable electricity, where nuclear's high capacity factor plays well.
• Policy shifts that reduce regulatory hurdles for new builds or small modular reactors may accelerate capital deployment.

Traditional Energy ETFs See A Reaction

Traditional fossil fuel ETFs also reflected the broader discourse. Broad energy funds such as the Energy Select Sector SPDR Fund (NYSE:XLE) and the Vanguard Energy ETF (NYSE:VDE) have traditionally benefited from deregulatory cycles and tax incentives. Though clearer links to clean energy rollbacks make the case compelling, performance in these funds has been mixed relative to narrower nuclear themes. Both funds are popular proxies for large oil and gas producers and are up by more than 2% each.

Notably, broad energy indexes struggled to outperform thematic clean and nuclear plays through 2025, suggesting investors already priced in some of the policy risks and opportunities ahead of Davos. However, net inflows into broad energy ETFs earlier in January underscored continued demand for traditional energy exposure amid market rotation.

Clean Energy ETFs Under Pressure — But Winners Still Exist

Investor enthusiasm around renewables has been tested in recent months amid policy headwinds. ETFs focused on clean energy, including the iShares Global Clean Energy ETF (NASDAQ:ICLN), Invesco Solar ETF (NYSE:TAN) and others covering wind, solar, and broader sustainable infrastructure, have seen choppy performance as federal incentives are cut and subsidy frameworks are reconsidered.

Even so, clean energy funds are far from irrelevant. Longer-term structural trends such as cost declines in solar and storage technologies and ongoing deployment in Europe and Asia continue to lend these products wind for patient investors.

Investor Takeaways

ETF flows and market pricing suggest a thematic rotation rather than a wholesale regime change:

• Nuclear and uranium-linked ETFs are pulling in interest, reflecting a belief that regulatory tailwinds and strategic demand could drive new growth.
• Broad energy ETFs maintain relevance as fossil fuel supply dynamics evolve, though they face headwinds from structural shifts in global energy consumption.
• Clean energy ETFs remain tied to secular transitions but are wrestling with near-term policy uncertainty.

In portfolio terms, this could mean strategic tilts toward thematic nuclear ETFs alongside diversified energy exposure, while maintaining selective positions in clean energy themes that benefit from global decarbonization trends.

Photo: Joey Sussman from Shutterstock