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S&P 500 DEI holdouts outperformed after Trump executive order

Research analyzing abnormal stock returns found firms that kept DEI practices or voted down anti-DEI proposals performed similarly to, and in some days outpaced, companies that backed away.

Reported · Written up by our desk · Sectors

Conservative threats to companies over diversity, inclusion and equity policies were expected to reshape corporate behavior after Donald Trump’s January 2025 executive orders targeting DEI in the federal government, including warnings that companies still supporting it could face consequences, according to the Guardian Business.

But new research shared exclusively with the Guardian Business suggests the market response did not penalize DEI holdouts. The study, authored by Jacob Grumbach, an associate professor at the University of California, Berkeley’s Goldman School of Public Policy, analyzed S&P 500 companies’ performance after the executive order using abnormal returns, a measure comparing expected stock performance versus actual results.

Grumbach found companies that kept their DEI policies, or voted down anti-DEI shareholder resolutions, performed just as well financially as firms that did not. The report adds that in the days after the executive orders were signed, companies that kept their DEI policies actually performed better on the stock market than those that backed away.

The Guardian Business also notes Grumbach’s view that whether DEI helps a company’s bottom line can depend on its consumer base, with firms that stood firm potentially better positioned to weather political pressure, as reflected in examples including Apple, while other companies were described as having pulled back.

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