NEW YORK (AP) — Wall Street is already making big bets on what President Donald Trump’s White House will do for the economy.
Since election day, Investors sent prices skyrocketing Stocks in banks, fossil fuel producers, and other companies Trump favors lower taxes and deregulation. For retailers, however, the outlook is even more uncertain as it is unclear whether they will be able to absorb the higher costs caused by tariffs.
Professional investors are warning of the risks of riding on momentum. Strong campaign rhetoric can cause such large swings, but not all promises translate into actual policy. Additionally, the overall U.S. stock market tends to be driven by long-term profit growth above all else.
— Stan Cho
Let’s take a look at where Wall Street is betting at the moment.
technology
Technology stocks soared during Trump’s first term, helped by his administration’s tax policies. However, the relationship was tumultuous. President Trump’s stance on immigration threatened the source of highly skilled immigrants who make up a significant portion of the industry’s workforce, and his trade war threatened international sales and supply chains.
This time around, the tech industry could benefit from an expected loosening of antitrust regulations that could hinder big deals and curb the power of Google, Apple and Amazon. Additionally, President Trump is expected to pave the way for Big Tech to move further into artificial intelligence technology. The sector is increasingly seen as a key battleground in the struggle for global power between the United States and China.
President Trump’s pledges to impose tariffs and other restrictions on trade have potential downsides for chipmakers, especially stock market darling Nvidia. There is also concern that the Biden administration’s efforts to expand U.S. semiconductor production may be set back.
Still, as a sign of a more conciliatory attitude in the tech industry, President Trump’s election has prompted widespread criticism from most industry figures, including Apple CEO Tim Cook, Amazon CEO Andy Jassy, and Google CEO Sundar Pichai. It was greeted with congratulatory posts.
— Michael Liedtke
retail
Trump’s victory has created great uncertainty in the retail industry.
President Trump has proposed extending the 2017 tax cuts for individuals and restoring previously cut tax cuts for businesses. He also wants to further reduce the corporate tax rate. Analysts said these would be a tailwind for shoppers and businesses.
But the president-elect’s trade proposals could have major downsides. He has proposed imposing 60% tariffs on Chinese goods and 10% to 20% on other imports. Neil Saunders, managing director at research firm GlobalData, said retailers will either take a big hit to their profits or be forced to raise prices.
In contrast to President Trump’s first term, Sanders said the tariffs will be more difficult to absorb this time around because retailers already have higher costs of doing business.
Many companies, including Nike and eyewear retailer Warby Parker, are diversifying their sourcing away from China. Shoe brand Steve Madden has announced plans to cut imports from China by up to 45% next year.
The National Retail Federation expects prices for U.S. shoppers to rise if President Trump’s new tariffs go into effect. For example, an $80 pair of men’s jeans will cost between $90 and $96.
— Anne D’Innocenzio
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energy
President Trump has said from his first day in office that he wants to “drill, drill, drill,” which could give traditional fossil fuel-based companies a boost while renewable energy companies may be at a disadvantage. has been done.
Oilfield services companies such as Halliburton and Schlumberger are likely to benefit from efforts to expand drilling in the Gulf of Mexico and Alaska. Natural gas companies including EQT and CNX Resources could benefit from facilities and pipeline projects. On the other hand, clean energy companies like First Solar and many electric car makers could find it harder to grow if President Trump cuts tax credits and other incentives for the industry.
But think back to President Trump’s first term, says Austin Pickle, investment strategy analyst at Wells Fargo Investment Institute. The assumption then, as now, was that President Trump would drive up the price of oil and gas stocks. But energy stocks were set to struggle in the second half of his term as oil prices briefly fell below zero during the COVID-19 pandemic.
— Damian Troise
health care
Pharmaceutical companies, insurance companies, and other health care companies could benefit from fewer regulatory hurdles to mergers and a more relaxed overall regulatory posture.
Insurers, in particular, could expect loosened regulations on Medicare Advantage plans, which are privately run versions of the government’s Medicare program that primarily cover people 65 and older. Under Democratic leadership, some insurance companies faced reductions in bonus payments associated with Medicare Advantage plans. Some drug companies are facing revenue hits with certain drugs covered by Medicare. Morningstar analysts said those challenges could be lessened under a Republican administration.
The second Trump administration may also challenge healthcare companies.
Morningstar analyst Karen Andersen said the role of anti-vaccine activist Robert F. Kennedy Jr. could make drug and vaccine approvals less predictable.
Morningstar’s Julie Utterback reports that Republicans are pushing back on health insurance companies that sell insurance in the Affordable Care Act’s insurance marketplaces and administer state and federally funded Medicaid coverage. He said attempts to dismantle parts of the law could face difficulties.
In particular, additional subsidies to support the purchase of marketplace insurance are set to expire at the end of next year, which could lead to a decline in enrollment.
— Tom Murphy
car
The auto industry should also welcome deregulation, but is concerned about tariffs.
President Trump is likely to rescind or eliminate the 2027-2032 exhaust gas emissions limits imposed by the Biden administration. Companies like General Motors, Ford and Stellantis will be able to more easily sell larger, less efficient cars without paying steep fines.
Kevin Tynan, research director at Presidio Group, said companies will also be under pressure to increase sales of electric vehicles to offset emissions from higher-margin heavy-duty trucks and SUVs.
Tariffs are another story. President Trump threatens to impose tariffs on imported cars to force more production in the US The threat to impose 100% tariffs on cars imported from Mexico is a big concern.
Morningstar analyst David Whiston said the tariffs could wipe out billions of dollars in profits for General Motors, Stellantis and Ford. Approximately 30% of GM’s North American production comes from Mexico, compared to 24% for Stellantis and 15% for Ford.
Whiston said tariffs on cars made in Mexico would violate the U.S.-Mexico-Canada Free Trade Agreement, which was negotiated during President Trump’s first term. However, that may be revised in July 2026. Mr Whiston said these tariffs would mean higher prices, and many buyers already could not afford to exceed the current average price of $47,000.
President Trump has also threatened to eliminate the electric vehicle tax credit that has helped boost sales of electric vehicles.
— Tom Krisher
bank
Bank stocks could benefit if President Trump’s policies boost the U.S. economy and more customers apply for loans. Additionally, Wells Fargo banking analyst Mike Mayo said President Trump’s victory marks a “new era” in which financial regulation will be eased after 15 years of strict oversight following the 2008-2009 financial crisis. I think there is a possibility that it will arrive. Under the Biden administration, banks faced the need to secure more capital to reduce risk, but the Trump administration is likely to take a step back.
Dealmaking could be revived under the Trump administration, and banks with major investment banking operations like Morgan Stanley and Goldman Sachs will be helped. This also increases the chances that the pending merger between Capital One Financial and Discover Financial will receive federal approval. Regional banks should benefit if economic growth encourages the creation of new small businesses or the expansion of existing ones.
— Paul Harloff
building materials and construction
Construction companies are considering various situations, as easing regulations could be a positive, but higher material costs could be a negative.
Construction companies such as homebuilders KB Home and PulteGroup could benefit from tax incentives and more friendly regulations. The surge in development could help relieve some of the pressure on the housing market, which is under pressure from a lack of new homes. Increased construction activity could also help suppliers of raw materials such as steel and aggregate used in concrete.
However, the possibility of an increase in overall raw material prices is a threat. Rising costs could reduce profits for construction companies and home builders. Steel tariffs may help protect U.S. producers from competition, but the resulting higher global prices could offset that benefit and also squeeze construction companies. There is sex.
Plans to crack down on immigration could exacerbate existing labor shortages and lead to project delays.
— Damian Troise
cryptography
Trump, once a crypto skeptic, has vowed to make America “cryptocurrency.” crypto assets Create a “strategic reserve” of Bitcoin. Since his victory, money has flowed into crypto assets. Bitcoin, the largest virtual currency, Soared above $86,000. Cryptocurrency platform Coinbase’s stock price has risen more than 60% since the election.
Crypto industry insiders welcomed Trump’s victory and hoped that he would push through long-sought legal and regulatory changes. And if elected, Trump has promised to fire Securities and Exchange Commission Chairman Gary Gensler, who has led and repeatedly guided the U.S. government’s crackdown on the cryptocurrency industry. called for further surveillance.
— Wyatt Grantham Phillips
