Donald Trump is headed back to the White House. Investors believe that’s much better news for some sectors of the U.S. economy than others—and the same goes for different parts of individual Americans’ stock portfolios.
Some plays seem obvious. Trump has traditionally been viewed as positive for banks and fossil fuel companies but a scourge for sectors like renewables. Trading on Wednesday morning suggests that view is largely unchanged.
Prior to the election, however, several analysts told Fortune the story might not be quite that simple. From tariffs to tax policy, other potential impacts of a second Trump administration also loom large. Below, we've rounded up stocks that might continue to rally or plunge ahead of Trump’s second inauguration:
Stocks to buy after a Trump win
Banks are at the crux of the Trump trade. Jay Hatfield, the CEO of Infrastructure Capital Advisors, isn’t a fan of stock picking based on the presidential race. Nonetheless, he’s willing to say financials will likely benefit from a second Trump term due to presumably lighter regulations. Shares of Goldman Sachs jumped 12% Wednesday morning, with the likes of Morgan Stanley, JPMorgan Chase, and Citigroup not far behind.
That could also hold true for private equity firms and other asset managers, which have been forced to weather a tough period for deal-making. Shares of alternative asset behemoth KKR, which stands to benefit from an uptick in both IPOs and M&A, rose 9% Wednesday to an all-time high above the $150 mark.
No sector is likely celebrating a Trump victory quite like the world of crypto, however, which he and the Republican party fully embraced in the summer. That resulted in massive financial support from the industry, which had chafed against the more restrictive policies of the Biden administration.
Shares of crypto exchange Coinbase jumped nearly 25% Wednesday morning. MicroStrategy, the largest public corporate holder of Bitcoin, saw its stock rise over 10% as the world’s biggest cryptocurrency smashed record highs.
Finally, energy is broadly seen a Trump play thanks to the former president’s promise to “drill, baby, drill.” Sam Stovall, chief investment strategist for CFRA Research, believes the supply and demand story could be a bit more complicated. Increasing oil production substantially, he said, would reduce the cost of oil.
“That would hurt the upstream companies that are drillers, [as well as] exploration and production companies,” he said, “but it would be helpful to the downstream.” The latter includes refiners like Valero Energy and natural gas transportation giant Kinder Morgan, who saw their stocks rise Wednesday over 4% and 6%, respectively.
Meanwhile, energy giants like ExxonMobil and rival Chevron are so-called integrated companies that operate both upstream and downstream. Shares of both increased slightly, despite a stronger dollar driving oil prices down.
Stocks to sell ahead of a Trump inauguration
It’s worth nothing that Hatfield is skeptical of the story of an upstream slowdown. He also believes the doom and gloom around the future of renewables under Trump is irrational, saying it’s unlikely Republicans will be able to follow through on their calls to repeal or significantly reshape the Inflation Reduction Act, which encourages investments in manufacturing and clean energy.
Investors didn’t share the same optimism on Wednesday, however. Shares of solar panel manufacturer First Solar fell over 10% Wednesday morning, while residential providers Sunrun and Sunnova saw their stocks plunge roughly 30% and 45%, respectively.
Danish company Orsted, the world’s largest offshore wind developer, has especially drawn the ire of Republicans in recent years. Its stock dropped 15% Wednesday morning.
Retailers, meanwhile, might be in trouble if Trump follows through on his promises to dramatically hike tariffs. As part of his calls to put “America First,” Trump has proposed at least a 10% tax on all U.S. imports and a minimum 60% tariff on all Chinese goods.
That’s especially bad news for Germany’s auto giants, who ship more cars to the U.S. than any other country. Shares of BMW and Volkswagen, for example, dropped 8% and 6%, respectively.
Mainstream economists emphasize that resulting price increases on imports will be passed on to American consumers, however, hurting many domestic companies. A major importer of cheap goods like Dollar General could be hit hard, Stovall said. The company's shares fell 5% Wednesday morning.
Meanwhile, retaliatory tariffs and trade wars could have a chilling effect on global trade, spelling a slowdown for cargo and logistics firms. Investors piled out of the world’s shipping giants Wednesday morning, with shares of Denmark’s AP Moller-Maersk and Germany’s DHL down 8% and 6%, respectively.
“If there’s less trade,” Stovall said, then there’s less money to be made.”
In short, this might just be the start of the shipping sell-off.
