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The stock market experienced significant movements on Wednesday following Donald Trump’s victory in the U.S. presidential election, as investors quickly adjusted their portfolios in anticipation of the winners and losers from a second Trump term.
Winners:
Tesla: Shares of Tesla surged by up to 15% in pre-market trading after Elon Musk, Tesla’s CEO, became one of Trump’s prominent supporters. Musk, who contributed more than $100 million to pro-Republican causes, has also been offered a role leading a new government efficiency department in a second Trump administration. Speaking at his Mar-a-Lago resort, Trump praised Musk, calling him “a super genius” and announcing that “a star is born.” Tesla’s positive momentum reflects the close relationship between Musk and Trump.
Banks: U.S. bank stocks saw a sharp rise as investors speculated that higher interest rates would persist under Trump, and that his administration would favor a lighter regulatory approach. Major banks such as JPMorgan, Bank of America, and Citigroup all experienced gains of more than 7%. Goldman Sachs and Morgan Stanley also saw their shares increase, fueled by expectations that tax cuts would spur deal-making activity.
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Mike Mayo, a Wells Fargo analyst, called this a “game-changer” and predicted that Trump’s administration would prioritize “resiliency with efficiency” instead of focusing solely on “resiliency at any cost.”
Private Equity: Shares of private equity firms like Blackstone, KKR, and Apollo Global rose by more than 5%. The market expects a Trump presidency to create a more favorable regulatory environment, encouraging deal-making and easing the way for private equity firms to sell investments to individual investors. This optimism comes after a slowdown in mergers and acquisitions, which had impacted profits in the industry.
Defense: Stocks in defense companies also saw a boost, driven by expectations that Trump’s administration would increase defense spending, particularly among European countries. Companies like Lockheed Martin and Northrop Grumman gained 2%, and in Europe, the Stoxx Europe aerospace and defense index climbed to an all-time high. Trump’s previous term pushed NATO members to spend more on defense, and analysts believe a second term could amplify this trend.
Oil and Gas: Oil companies also saw a rise in their stock prices, as Trump has consistently supported the oil and gas sector. Companies such as ExxonMobil and Chevron saw gains of up to 3%, despite a stronger dollar exerting downward pressure on oil prices. Trump has repeatedly vowed to loosen environmental regulations and encourage more domestic drilling.
Losers:
Renewable Energy: The renewable energy sector took a significant hit as investors feared that Trump could roll back Biden-era tax breaks and subsidies that had benefited green energy companies. Danish companies like Ørsted, a leading offshore wind farm developer, and turbine manufacturer Vestas saw their stocks drop by as much as 14% and 10%, respectively. The S&P Global Clean Energy index, which tracks top clean energy companies, fell nearly 3%. Industry experts had expected a downturn if Trump won, especially after he pledged to halt offshore wind projects on his first day in office.
Tariff-Exposed Sectors: The possibility of new tariffs under a Trump presidency weighed on stocks in several sectors, particularly those exposed to international trade. European carmakers, such as BMW and Volkswagen, saw their shares drop by as much as 6%, reflecting concerns over Trump’s plans to impose hefty tariffs—up to 20% for European goods and 60% for Chinese imports. Similarly, major shipping companies like Denmark’s AP Møller-Maersk and Germany’s Hapag-Lloyd faced declines as the prospect of a trade war with China loomed.
