Investors are placing bets on stocks that could benefit if former President Donald Trump returns to the White House. The speculation has intensified following an assassination attempt on the Republican candidate and a debate that dealt a blow to Democratic President Joe Biden, which analysts believe have increased the chances of a Republican victory.
Trump’s social media company, Trump Media & Technology Group (DJT), isn’t the only stock experiencing a surge. Trump has hinted at his policy preferences, saying, “Drill baby drill, and close our borders,” during the Republican convention.
Private Prisons Surge on Immigration Stance
Private prison companies have seen significant gains, driven by Trump’s tough stance on illegal immigration. Shares of GEO Group (GEO), a Florida-based private prison investor, have risen over 28% in the past month. CoreCivic (CXW), which manages private prisons and detention centers in the US, has seen its stock climb more than 27%.
Energy Sector Anticipates Regulatory Relief
Energy stocks are poised to benefit from Trump’s promise of fewer restrictions on permits and drilling. Despite geopolitical factors playing a significant role in energy stock performance, a Trump presidency could lower permitting costs and boost profitability for oil companies, according to Matt Stephani, president of Cavanal Hill Investment Management. ExxonMobil (XOM) and EQT Corporation (EQT) are among the companies expected to gain from potential policy changes. Additionally, coal producer Peabody Energy (BTU) and steel company Nucor (NUE) have seen their stocks rise by roughly 7% since the June debate, anticipating increased US manufacturing.
EV Market Faces Uncertainty
Trump has vowed to scale back Biden’s clean energy initiatives, including electric vehicle mandates. While this could challenge the broader EV market, analysts suggest Tesla (TSLA) might still thrive due to Elon Musk’s close relationship with Trump. Higher tariffs on China could also reduce competition from cheaper Chinese EV manufacturers.
Cryptocurrency Sector Gains Momentum
Bitcoin (BTC-US) has risen roughly 10% since the assassination attempt on July 13, hovering near $65,000 per token. Trump’s recent embrace of cryptocurrency, including accepting campaign donations in Bitcoin and planning to speak at the Bitcoin Conference in Nashville, has boosted crypto-related stocks like Riot Platforms (RIOT), MicroStrategy (MSTR), and Coinbase (COIN), which have surged 35%, 21%, and 16%, respectively.
Financials and M&A Stocks Expected to Benefit
Banks, particularly regional ones, could benefit from expected regulatory easing under a Trump administration. Financial firms specializing in mergers and acquisitions, such as Lazard (LAZ), Moelis (MC), and Evercore (EVR), have seen double-digit percentage gains since the late June debate, anticipating a more favorable climate for M&A activities.
Freddie Mac and Fannie Mae Privatization
Trump’s push to privatize government-sponsored mortgage enterprises Fannie Mae (FNM.SG) and Freddie Mac (FHL.SG) has kept these stocks in the spotlight. Freddie Mac has risen more than 60% year to date and over 6% in the past month, while Fannie Mae shares have increased 34% this year and more than 7% in the past month.
As Wall Street continues to react to the shifting political landscape, investors are positioning themselves to capitalize on a potential Trump presidency, which could bring significant changes to various sectors.
