2024 US elections: impact on stock market sectors under Trump vs. Harris

The 2024 US 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 US 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, benefiting 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 like JPMorgan Chase, Bank of America, and 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, such as Oracle and Cisco.

• Automotive: For the auto sector, producers with strong exposure to the domestic market, like Ford and 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

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, which could put pressure on pharmaceutical companies but benefit healthcare stocks like UnitedHealth, CVS Health, and 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 US infrastructure stocks that could rise: Caterpillar, Vulcan Materials, Nucor.