Election Day is here, and investors are on edge. The race between Vice President Kamala Harris and former President Donald Trump, as well as the battle for Congress, are down to the wire. The outcome will be consequential for markets on many fronts, including dictating policies that could hurt, or boost, different industries, as well as tax and spending plans that will influence the direction of interest rates and the U.S. dollar. “No election outcome would surprise us at this point,” wrote Paul Gallant, Washington policy strategist at TD Cowen, in a note last week. “Battleground states [are] all well within margin-of-error.” “For 1st time in history, House & Senate could flip to opposite parties in a single election. Very on brand for 2024,” Gallant wrote. Generally, a Trump win is seen as positive for financials given a higher likelihood of deregulation for companies in the space. Traditional oil and gas names are also likely to benefit under a second Trump presidency. Under a Harris presidency, clean energy stocks are expected to get a boost as the vice president is likely to keep the Inflation Reduction Act in place. The IRA includes provisions that have sparked a clean energy boom in the U.S. Trump, however, could move to repeal it. As for the broader market, Goldman Sachs broke down how the S & P 500 may trade depending on the outcome. Under a GOP sweep, the bank sees the S & P 500 rallying 3%. A Democratic sweep, however, would spark a 3% sell-off for the benchmark. Smaller stocks are also seen as beneficiaries of a Trump win. CNBC Pro has been breaking down down which stocks could do well under different election scenarios, as well as the market reaction, based on Wall Street research as well as interviews with analysts and investors. Here’s what we found in one place: Trump and Harris baskets from Strategas Strategas Research recently compiled two stock baskets . One is made up of stocks that benefit after a Harris win; the other would outperform under a second Trump presidency. “We continue to believe this is the most investable election of our lifetimes,” policy analyst Daniel Clifton wrote in a recent note to clients. “The differences between Trump and Harris are as wide as we have ever seen.” In the Trump basket are: Axon Enterprise Bank of America Cleveland-Cliffs Strategas pointed to these stocks as Trump beneficiaries, citing the candidate’s protectionist stances, including higher tariffs on Chinese steel, as well as the likelihood of deregulation in the financial industry. Harris, in contrast, is less likely to implement higher tariffs — which could boost companies that depend on imported goods like Best Buy. Strategas also sees a Harris win as a boon for clean energy names. In the Harris basket are: Ford Motor Best Buy NextEra Energy AXON YTD mountain AXON in 2024 For more, check out our full story . UBS sees a Harris win as a tactical negative, but some winners would emerge UBS strategist Andrew Garthwaite noted that a Trump victory would be a net positive for the stock market, while a Harris win would put pressure on stocks in the short term. That said, some individual winners would arise under either scenario. Garthwaite said financial services and manufacturing names would do well under Trump, while some tech and solar energy stocks would perform better under Harris. Some stocks in UBS’ Trump basket are Goldman Sachs and Cleveland-Cliffs . Apple and Enphase Energy are part of the bank’s Harris basket. For more, check out our full story . Playing the energy sector One of the sectors that could see major disruption after the election is energy, especially under a Trump win. If Harris wins, she is expected to preserve the Inflation Reduction Act, which has boosted a transition into renewable energy. However, the IRA passed without GOP support — making it susceptible to a repeal if Trump is victorious. To be sure, the latter scenario hinges on Republicans also obtaining majorities in both the House and Senate. Some stocks and assets to keep an eye on: SolarEdge Technologies Enphase Energy First Solar Invesco Solar ETF (TAN) TAN YTD mountain TAN year to date On the traditional energy front, investors should keep an eye on giants Exxon Mobil and Chevron . For more, check out our story . Retail stocks vulnerable to tariffs Retail stocks could take a hit from higher tariffs given many of them are reliant on imports from China. “Trump rhetoric on tariffs has already raised concern in many consumer names. He has proposed 10-20% tariffs on most imports, and we’ve heard levies as high as 60%+ for China. Harris’ policy is less clear, but likely more in line with the Biden administration. Pricing is ultimately an offset, but ability to pass this through varies; knock-on geopolitical tension is also concern. The election outcome is a key data point for most exposed names,” Wells Fargo analyst Ike Boruchow wrote. Boruchow pointed to stocks like Five Below and Target that could be in trouble under a harsher tariff regime. For more, here’s the full story . Trump-linked stocks There are also certain stocks poised to directly benefit from a Trump victory, including Trump Media & Technology . Trump Media, which traders under the ticker DJT — also Trump’s initials — has more than doubled this year but has also been under pressure recently. Over the past week, the stock has plunged 28%. The stock has served as a proxy for Trump’s odds of winning the election — even as polls show him and Harris deadlocked heading into Tuesday’s vote. Other stocks linked to Trump are Phunware , a mobile software and blockchain company, along with Rumble , a video platform popular with conservatives. DJT 1M mountain DJT 1-mo chart Check out the full story for more. Don’t forget about small caps Small-cap stocks are seen as a potentially major winner under a Trump presidency, given the former president’s willingness to roll back regulation and cutting tax rates further for companies. Trading in the group has been somewhat linked to Trump’s odds of winning, though not to the extent as shares of Trump Media, for example. The iShares Russell 2000 ETF (IWM) — which tracks the small-cap Russell 2000 index — soared after Trump’s debate against President Joe Biden in late June. Once Harris entered the race the fund consolidated before recovering. IWM 6M mountain iShares Russell 2000 ETF, 6 months As of Tuesday afternoon, the IWM was up more than 10% for the year. Last month, Morgan Stanley broke down its top picks within small caps. Among them are Planet Fitness , Cadence Bank and Viking Therapeutics . All of these stocks are rated overweight by the bank. The crypto trade Crypto has been at the forefront of this election, with Trump signaling his support for the industry in his campaign. Under a Trump presidency, expectations are for digital currencies such as bitcoin to scale to new heights due to a more favorable regulatory regime. A Harris administration, however, isn’t seen as favorable for crypto. “What’s driving price action is undoubtedly the election,” Nic Puckrin, CEO and co-founder at crypto education site Coin Bureau, told CNBC Pro . “The markets will take their cue based on who wins the White House. Trump is widely seen as pro-crypto although irrespective of who wins, bitcoin is still primed for a pump.” Some stocks and ETFs to keep an eye on include Coinbase and the iShares Bitcoin Trust ETF (IBIT) . Coinbase shares are up 12% year to date. IBIT, which launched earlier this year, has popped 30% over the past three months. The dollar The dollar will be a key asset to watch, especially as election results roll in. Many investors see the U.S. currency rising under a Trump presidency with his protectionist policies such as tariffs. UBS, however, thinks this higher dollar would be short lived. “Although the US dollar could strengthen in the near term in the event of a Trump victory, we anticipate medium-term dollar depreciation regardless of the winner and suggest that investors consider using periods of strength to diversify dollar exposure toward other G10 currencies,” Solita Marcelli, chief investment officer of the Americas at UBS’s wealth management division, wrote in a note Monday. “Fundamentally we believe a combination of the dollar’s overvaluation, a shrinking yield advantage over other currencies, and the US’s significant twin fiscal and current account deficits is likely to weigh on the currency regardless of the victor,” Marcelli said. Financials could be a big winner A Trump presidency would likely lead to regulations being rolled back on the financial services industry, which could lead to big gains ahead. However, a Harris win is expected to keep current regulation measures in place, and possibly introduce new ones. “From a U.S. post-election positioning perspective, the Financials sector is, by far, the biggest winner under a Trump win from deregulation and higher rates/steeper yield curve,” Wolfe Research strategist Chris Senyek wrote. Some stocks to watch in the space include Evercore and Lazard , per Wolfe. Private equity giants KKR and Blackstone would also benefit under a Trump win. Evercore and Lazard are up more than 50% each, while KKR and Blackstone have popped 67% and 28%, respectively.
Which stocks Wall Street expects to benefit under Trump or Harris
