How a digital tilt may help buffer against global tariffs

Key takeaways:

• Rising global tariffs have increased costs and added uncertainty for many goods-producing sectors.
• Roughly 28% of the Nasdaq-100’s exposure has been in software and consumer digital services—areas that are often less directly affected by physical trade barriers.
• Invesco QQQ ETF’s digital tilt may offer some resilience in a protectionist environment, though potential risks remain.

A new tariff reality

In 2025, tariffs have re-emerged as a central market theme. Although fluctuating quickly, U.S. trade policy now includes duties averaging 18.6% across more than 60 countries, with some rates approaching 50%.¹

Physical goods producers—particularly in manufacturing and automotive—are feeling the pinch of higher costs. Heavy equipment leader Caterpillar’s input costs rose by 6.5%, while beer giant Molson Coors said it expects aluminum-related expenses up to $35 million due to tariffs.²

These pressures ripple through supply chains, squeezing profit margins and forcing companies to rethink sourcing and logistics. While some firms are adapting by rerouting trade flows or front-loading shipments, 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 seeks to track, skew toward digital-first business models. Well-known examples include Microsoft, Meta Platforms, Alphabet, Netflix, and Adobe.

In fact, nearly 28% of the Nasdaq-100 consists of software and consumer digital service companies as defined by Industry Classification Benchmark (ICB) subsectors.³ These companies primarily deliver products digitally and generate revenue streams largely outside the reach of traditional tariffs.

“By having nearly a third of the index exposure derive revenues outside of physical products affected by tariffs, it introduces resilience in an uncertain regime and application of global tariffs,” according to Nasdaq Global Indexes.³

QQQ holdings with digital-delivery business models

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 Services, 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 driving 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 third 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.