NEW YORK (AP) — Wall Street is already making massive bets about what Take Two for a Donald Trump-led White House will mean for the economy.
Since Election Day, investors have pushed up prices for stocks of banks, fossil fuel producers and other companies expected to benefit from Trump’s preference for lower tax rates and looser regulation. For retailers, meanwhile, the outlook is bleaker as they are uncertain whether they will be able to absorb the higher costs caused by the tariffs.
Professional investors warn of the danger of getting carried away by the momentum. While mighty rhetoric in election campaigns can create these massive swings, not all promises translate into actual policy. Additionally, the broader U.S. stock market tends to be more focused on long-term earnings growth than anything else.
–Stan Choe
Here’s a look at what Wall Street is betting on right now:
technology
Technology stocks rose sharply during Trump’s first term, helped by the administration’s tax policies. But the relationship has been stormy: Trump’s immigration stance threatened a source of highly skilled immigrants that makes up a significant portion of the industry’s workforce, and his trade wars threatened international sales and supply chains.
This time, the tech industry could benefit from an expected relaxation of antitrust rules that discourages massive deals and threatens to curb the power of Google, Apple and Amazon. Trump is also expected to pave the way for major tech companies to make further forays into artificial intelligence technology, an area increasingly seen as a key battleground in the U.S.-China duel for global power.
Trump’s promise to impose tariffs and other trade restrictions actually poses a potential problem for chipmakers, particularly stock market darling Nvidia. A possible setback in the Biden administration’s efforts to boost U.S. semiconductor production is also a concern.
Still, Trump’s election was greeted as a sign of the tech industry’s more conciliatory stance with congratulatory posts from most industry luminaries, including Apple CEO Tim Cook, Amazon CEO Andy Jassy and Google CEO Sundar Pichai.
— Michael Liedtke
retail
Trump’s victory brings with it a great deal of uncertainty for retailers.
Trump has proposed extending the 2017 personal tax cuts and reinstating corporate tax breaks that were cut. He also wants to further reduce the corporate tax rate. That would be a tailwind for buyers and companies, analysts said.
But the president-elect’s trade proposals could have a major downside. He has proposed tariffs of 60% on Chinese goods and tariffs of 10% to 20% on other imports. Neil Saunders, chief executive of research firm GlobalData, said retailers would either suffer massive hits to profits or be forced to raise prices.
Unlike Trump’s first term, retailers will have a harder time absorbing the tariffs this time because their costs of doing business are already higher, Saunders said.
Many companies, including Nike and eyewear retailer Warby Parker, have diversified their sourcing outside of China. Shoe brand Steve Madden plans to reduce imports from China by up to 45% next year.
The National Retail Federation predicts higher prices for US shoppers if Trump’s fresh tariffs are implemented. For example, a pair of men’s jeans that cost $80 would cost $90 to $96.
—Anne D’Innocenzio
energy
Trump has said he wants to “drill, drill, drill” from day one of his presidency. Traditional fossil fuel-focused companies are therefore expected to receive a boost and renewable energy companies could be disadvantaged.
Oilfield services companies like Haliburton and Schlumberger would likely benefit from initiatives to expand drilling in the Gulf of Mexico and Alaska. Natural gas companies like EQT and CNX Resources could benefit from assets and pipeline projects. Meanwhile, spotless energy companies like First Solar and many electric vehicle makers could find it harder to grow if Trump cuts tax credits and other incentives for the industry.
But remember Trump’s first term, says Austin Pickle, investment strategy analyst at Wells Fargo Investment Institute. Then, as now, the assumption was that Trump would drive up prices for oil and gas stocks. But toward the end of his term, energy stocks ran into trouble when oil prices briefly fell below zero during the COVID-19 pandemic.
— Damian Troise
Healthcare
Drugmakers, insurers and other healthcare companies could benefit from fewer regulatory barriers to mergers and an overall looser regulatory stance.
In particular, insurers may see some regulatory relief for Medicare Advantage plans, which are privately run versions of the federal Medicare program aimed primarily at people age 65 and older. Under Democratic leadership, some insurers faced reduced bonus payments associated with their Medicare Advantage plans. Some drug manufacturers face lost sales of certain drugs covered by Medicare. Those challenges could ease under Republican rule, analysts at Morningstar noted.
A second Trump administration could also challenge healthcare companies.
Drug and vaccine approvals could become less predictable depending on the role played by anti-vaxxer Robert F. Kennedy Jr., Morningstar analyst Karen Andersen said.
Health insurers that sell coverage on the Affordable Care Act’s insurance marketplaces or manage state and federally funded Medicaid plans could face challenges if Republicans try to repeal parts of the law, Morningstar’s Julie Utterback said.
In particular, the additional subsidies that support people buy marketplace insurance are expected to expire at the end of next year, which could lead to a decline in enrollment.
–Tom Murphy
Cars
The automotive industry should also welcome less restrictive regulations but fear tariffs.
Trump is likely to roll back or repeal the 2027 to 2032 exhaust emissions limits imposed by the Biden administration. Companies like General Motors, Ford and Stellantis could more easily sell larger, less productive vehicles without paying hefty fines.
Companies would also be under less pressure to sell more electric vehicles to offset emissions from vast trucks and SUVs that generate massive profit margins, said Kevin Tynan, research director at Presidio Group.
Things are different when it comes to tariffs. Trump has threatened tariffs on imported vehicles to force higher production in the United States. The threat of 100 percent tariffs on vehicles imported from Mexico is a major concern.
Morningstar analyst David Whiston said such tariffs could potentially cost General Motors, Stellantis and Ford billions of dollars in profits. About 30% of GM’s North American production comes from Mexico, while Stellantis has 24% and Ford about 15%.
Whiston points out that tariffs on vehicles built in Mexico would violate the U.S.-Mexico-Canada free trade agreement negotiated during Trump’s first term. However, this can be done again in July 2026. Whiston said these tariffs would mean higher prices and many buyers already can’t afford the current average price of more than $47,000.
Trump has also threatened to eliminate electric vehicle tax credits, which have helped boost electric vehicle sales.
–Tom Krisher
Banks
Bank stocks could benefit if Trump’s policies stimulate the US economy and more customers apply for loans. Additionally, Mike Mayo, banking analyst at Wells Fargo, believes the Trump victory may usher in a “new era” of looser financial regulation, after 15 years of tighter supervision following the 2008-2009 financial crisis. Under Biden, banks have been forced to deploy more capital to mitigate risk, but the Trump administration is likely to take a step back.
There could be a revival of deal-making under Trump, helping banks with major investment banking firms like Morgan Stanley and Goldman Sachs. This also increases the chances that the upcoming merger between Capital One Financial and Discover Financial will receive federal approval. Regional banks should benefit when a growing economy stimulates the creation of fresh compact businesses or the expansion of existing ones.
—Paul Harloff
Building materials and construction
Construction companies see a mixed picture: stricter regulations are a plus, but higher material costs are a potential disadvantage.
Home builders, including home builders KB Home and PulteGroup, could benefit from tax incentives and friendlier regulations. A development push could support ease pressure on the housing market, which is suffering from a lack of supply of fresh homes. An upswing in construction could also benefit suppliers of raw materials such as steel and aggregates for concrete.
But the potential for overall commodity prices to rise is a threat. Higher costs could reduce the profits of construction companies and home builders. Steel tariffs could support protect U.S. producers from competition, but a resulting rise in world prices could erase that advantage while squeezing construction companies.
Plans to crack down on immigration could worsen existing labor shortages and lead to project delays.
— Damian Troise
Crypto
Trump, once a crypto skeptic, has promised to make the US the “crypto capital of the planet” and create a “strategic reserve” of Bitcoin. Since his victory, money has flowed into crypto assets. Bitcoin, the largest cryptocurrency, has risen above $86,000. Shares of crypto platform Coinbase have risen more than 60% since the election.
Crypto industry players welcomed Trump’s victory, hoping he would enact the legal and regulatory changes they had long advocated for. And Trump had promised, if elected, to remove Securities and Exchange Commission Chairman Gary Gensler, who has led the U.S. government’s crackdown on the crypto industry and repeatedly called for more oversight.
—Wyatte Grantham Phillips
