Market outlook How a digital tilt may help buffer against global tariffs

A new tariff reality

Tariffs remain a central market theme, even as the rules keep shifting. In February 2026, the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA).¹ New duties of 10% or 12.5% now apply to imports from 60 economies, and steel and aluminum products face effective tariff rates above 40%.²

Most physical goods producers — particularly in manufacturing and automotive — are feeling the pinch of higher costs. In a 2026 KPMG survey, 78% of organizations reported higher cost of goods sold in their most recent quarter, and 34% said they were passing more than half of tariff costs on to customers.³

These pressures can ripple through supply chains, often squeezing profit margins and forcing companies to rethink sourcing and logistics. While some firms are adapting by rerouting trade flows, diversifying suppliers, or reshoring production, the global economy still faces a challenging environment for goods-heavy industries.

Why QQQ may be positioned differently

Some of the top holdings in the Nasdaq-100® Index, which Invesco QQQ ETF tracks, skew toward digital-first business models. Well-known examples include Microsoft, Meta Platforms, Alphabet, Netflix, and Adobe.

In fact, approximately 24.4% of the Nasdaq-100 consists of software and consumer digital service companies as defined by Industry Classification Benchmark (ICB) subsectors.⁴ These companies primarily deliver products digitally and generate revenue streams largely outside the reach of traditional tariffs.

This composition can potentially act as a buffer during periods of trade friction. Digital-first delivery models avoid many of the logistical choke points — ports, customs clearances, raw material sourcing — that can weigh on manufacturing or commodity-based firms.

Of course, QQQ provides exposure to more than just the Information Technology sector. The Nasdaq-100 contains the largest non-financial companies listed on the Nasdaq, representing sectors including Consumer Discretionary, Healthcare, and Industrials. Recognized for its focus on innovation and market leadership, the index features many of the world’s most well-known brands alongside emerging companies helping drive growth in their industries.

Implications for investors

For growth-oriented investors, QQQ’s digital exposure may offer a measure of insulation from tariff-driven volatility while still providing exposure to leading innovation-driven companies. The index’s sector mix has historically leaned toward Information Technology and Communication Services, with holdings that include some of the world’s most influential software platforms, cloud providers, and consumer digital networks among its top holdings.

However, this does not make QQQ immune to macro risks. Global tariffs can still influence market sentiment, capital flows, and broader economic growth, which in turn can impact digital-first firms. Additionally, valuations in tech and digital services can be sensitive to interest rate changes and shifts in investor risk appetite.

Bottom line

A protectionist environment can present challenges across markets — but not all sectors are equally exposed. With nearly a fourth of its exposure in software and consumer digital services, QQQ may offer a way to maintain growth exposure while reducing reliance on goods-producing industries vulnerable to tariff shocks.

For those seeking resilience in an era of shifting trade policy, QQQ’s digital tilt may be a differentiating factor.