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2024 U.S. Elections: Impact on Stocks

How the 2024 US election could reshape Wall Street. From energy to tech, discover which stocks may soar or slump based on the winner.

Source: Getty Image

The 2024 U.S. elections could have a significant impact on various sectors of the US stock market, depending on who becomes the new president between the two contenders: Republican candidate Donald Trump and Democratic candidate Kamala Harris. Let's analyse and predict the possible impact on U.S. stocks from the two potential outcomes: a Donald Trump victory and a Kamala Harris victory.

Victory of Republican Candidate Donald Trump

A second Trump term is expected to impact several sectors:

  • Energy: Trump is expected to prioritise a further increase in domestic oil and gas production, pushing up stocks such as Exxon Mobil, Chevron, and Baker Hughes in the oil sector. However, in the long term, increased production can lead to a reduction in crude oil prices, so energy stocks may not rise as much as anticipated.
  • Defence: Defence stocks, such as Lockheed Martin, General Dynamics, RTX Corporation, and Northrop Grumman, should thrive due to spending policies favouring the sector.
  • Finance: Deregulation choices in the sector could be very positive for banks (JPMorgan Chase, Bank of America, Goldman Sachs).
  • Technology: The impact could be mixed. Potential trade wars, particularly with China, could harm companies with global supply chains like Apple and Nvidia. Deregulation and corporate tax reduction could benefit tech giants with strong domestic markets (Oracle, Cisco).
  • Automotive: For the auto sector, producers with strong exposure to the domestic market (Ford, General Motors) are preferable. In the EV segment, Tesla could rise on the back of strong support from Elon Musk for Trump's election campaign.

Lockheed Martin, Bank of America & JP Morgan vs. S& P500 during next 12 months following Trump’s election in Nov. 2016

Lockheed Martin, Bank of America & JP Morgan vs. S& P500 during next 12 months following Trump’s election in Nov. 2016 Source: TradingView

Victory of Democratic Candidate Kamala Harris

Kamala Harris would likely continue many of the Biden administration's policies, influencing sectors differently:

  • Clean Energy and EV: A Harris presidency would likely stimulate renewable energy stocks, particularly in the electric vehicle (Lucid, Rivian) and solar energy (NextEra, First Solar, Enphase Energy, Sunrun) sectors. The Democratic candidate has supported ambitious clean energy policies, such as a possible fracking ban and increased charging networks for electric cars.
  • Healthcare: Harris could promote healthcare reforms, particularly regarding Medicare drug price negotiations. This could put pressure on pharmaceutical companies but benefit healthcare stocks (UnitedHealth, CVS Health, Centene Corporation).
  • Technology: Harris has taken a proactive stance on artificial intelligence regulation, which could create short-term uncertainty for AI-related stocks like Nvidia and Palantir Tech, as further regulations could impact growth.
  • Infrastructure: A Kamala Harris victory would likely signal an increase in federal infrastructure spending, focusing on green energy, transportation, and broadband expansion as part of climate and modernisation initiatives. Here are some U.S. infrastructure stocks that could rise: Caterpillar, Vulcan Materials, Nucor.

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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