World Stock Watch

Presidential Election Impact on Stock Markets: What to Expect

As the US presidential election approaches, investors are bracing themselves for the potential impact on stock markets. With polls indicating a tight race between Vice President Kamala Harris and former President Donald Trump, analysts are weighing in on how different outcomes could affect various sectors.

A Trump Win: Boost to Equity Markets?

A majority of analysts believe a Trump win could boost equity markets, driven by his pledge to cut corporate taxes and decrease regulations. This could lead to a short-term market surge, particularly benefiting sectors such as banking and energy.

Banks: A Trump Win Could Bring Benefits

A Trump win or Republican sweep could lift Wall Street banks like JPMorgan Chase, Bank of America, and Wells Fargo, thanks to improved domestic investment, looser regulations, and tax cuts. However, concerns around a wider trade deficit and tariffs could offset these gains.

Crypto Stocks: A Pro-Crypto SEC Chair?

Under a Trump win, crypto stocks like MicroStrategy, Riot Platforms, and MARA Holdings could benefit from a more receptive regulatory approach. TD Cowen analysts highlight the likelihood of Trump naming a pro-crypto SEC chair.

Energy: Prioritizing Domestic Production

Morgan Stanley analysts believe a Trump presidency could prioritize reducing the regulatory burden on domestic oil and gas production, benefiting companies like Chevron, Exxon Mobil, and ConocoPhillips. However, Trump’s proposed 60% tariff on Chinese imports could hit LNG exporters like Cheniere Energy and New Fortress Energy.

Other Sectors to Watch

• Trump-Related Stocks: Trump Media & Technology Group, Phunware, and Rumble could gain further if Trump wins.
• Prison Operators: Geo Group and CoreCivic may benefit from Trump’s re-election, driven by promises of a crackdown on illegal immigration.
• Carriers: A Trump term could hurt demand for parcel carriers like FedEx, United Parcel Service, and C.H. Robinson Worldwide.
• Small-Cap Stocks: U.S.-focused companies could benefit from business incentives and tariffs that favor domestic production.
• Homebuilders: Harris’ pledge to build more homes and reduce costs could boost homebuilders like D.R. Horton, KB Home, and Lennar.
• Healthcare: Harris’ plans to cut healthcare costs could weigh on pharmaceutical giants, while healthcare insurers like Humana and UnitedHealth Group may benefit from expanded coverage.
• Corporate Taxes: Harris’ proposal to tax corporations and the wealthy could help the U.S. deficit, but may negatively impact companies like Microsoft, Apple, and Alphabet.
• Renewable Stocks: Green energy firms like NextEra Energy, Plug Power, and Bloom Energy could thrive under Harris, driven by increased incentives and supportive policies.