How a Trump or Harris presidency could impact your investments

In This Article:

Harris and Trump.
Getty Images; Jenny Chang-Rodriguez/BI
  • The presidential election has the potential to reshape the investment landscape.

  • Detailed below is what Wall Street is saying about investing implications across asset classes.

  • This is the first in a five-part series about the impacts either a Trump or a Harris presidency could have on US consumers.

With the presidential election just over a week away, and the candidates in a dead heat in the polls, Americans are in suspense about how their lives will change under a new leader.

Business Insider has prepared a five-part refresher amid the final stretch to unpack the impacts that either a Donald Trump or a Kamala Harris presidency could have on US consumers. This first installment is focused on the investment landscape.

Trump and Harris have each outlined policy proposals that would affect different parts of the stock market. The platform of whoever wins will also be crucial in determining the path of interest rates, which shape the bond market.

But they're not expected to have diametrically opposed impacts on everything, with both candidates seen as positive forces for crypto.

Detailed below is the latest research and commentary from top Wall Street strategists outlining how the market and investing landscape could shift under a Trump or a Harris administration.

The guide covers four asset classes and is divided between the impact Trump or Harris could have on each.

Stocks

For equities, it's helpful to look at how both the micro (specific sectors set to be affected) and the macro (how the broader market will respond) could be influenced.

Trump

Sectors

Much of the industry guidance for the stock market under Trump boils down to his proposed tax policies. Bank of America estimates his plan to cut the corporate tax rate to 15% from 21% would boost corporate earnings by 4%. How much it would influence each sector would ultimately depend on sensitivity to changes in the tax rate.

To that end, BofA says the consumer-discretionary and communication-services sectors — the areas most sensitive to tax-rate changes — would benefit the most. On the flip side, less exposed areas, such as utilities, real estate, and energy, would get the smallest boost.

For energy, specifically, Trump's pro-drilling stance — while supportive of industry activity — would likely lead to oversupply and lower oil prices, BNY Wealth says. That, in turn, would hurt corporate profitability in the sector and drag on stock prices.

It's also worth noting that energy was the worst-performing sector during Trump's administration.

Another area of the stock market seen as benefiting from a Trump win is financials. Allies of the former president have said he aims to unburden banks from many of the regulations that were imposed following the 2008 financial crisis, something that his first administration tried to do, with limited success.