President-elect Donald Trump ran on a platform of deregulation, corporate tax cuts, and policies favorable for business. And following his victory, the stock market captured historical gains.
Among the biggest winners were companies in energy, financial services, and industrials. But what other sectors are expected likely to grow under the second Trump presidency?
Oil and Gas
Trump has long been a proponent of the fossil fuel industry and domestic energy production. In fact, the Morningstar U.S. Energy Index went up 4.3 percent by midday, following the 2024 election.And the companies linked to the oil and gas sector may benefit from Trump’s policies moving forward.
Looking back, Trump loosened regulations on the fossil fuel industry and withdrew the United States from the Paris Agreement during his first term. President Joe Biden reinstated the United States into the Paris Agreement. But Trump is expected to once again withdraw the United States from the international treaty and pull back the red tape on the fossil fuel industry.
Financial Services
Trump’s stance on deregulation could mean big wins for big banks, credit unions, and credit card companies.
The Morningstar U.S. Financial Services Index, which contains some of the nation’s largest banks such as J.P. Morgan, was up nearly 6.3 percent on the Wednesday afternoon following the election.
And Trump is expected to move forward with bank deregulation efforts such as rolling back on the Basel III Endgame proposals, which aim to set larger capital requirements for large banks.
The president-elect could also change leadership across major banking regulators such as the Federal Deposit Insurance Corporation (FDIC) and Consumer Financial Protection Bureau.
In fact, the retirement of FDIC Chairman Martin Gruenberg, effective Jan. 19, raised more speculation that the Trump administration would move swiftly with deregulation in the banking sector. And Gruenberg’s absence means a Republican majority in the FDIC board.
Defense Sector
During his first term, Trump ushered in a wave of defense spending and even established another branch of the armed forces: The Space Force.And with ongoing threats across the globe and cyberattacks reaching all-time highs, the president-elect may push for higher defense spending and more ambitious projects.
For instance, Trump has spoken of potentially having an Iron Dome Missile Defense Shield system.
“We will build a massive defense shield all made in the U.S.A.,” Trump said during a rally at Madison Square Garden in October. “We’re going to build a beautiful dome over our country, and a lot of it’s going to be made right here in New York. We will rebuild our cities, including our capital in Washington, D.C., which has become a very dangerous and badly managed place.”
And the administration likely won’t ignore enemies in the cyber theater.
U.S. cyberattacks increased by 56 percent from 2023 levels, according to a report by cybersecurity company Check Point Software Technologies. That brings cyberthreats to an average of 1,300 per organization per week.
Infrastructure
A cornerstone of Trump’s “Make America Great Again” agenda has been the rapid development of the nation’s infrastructure. And the real estate mogul’s proposals for lower corporate taxes and deregulation could mean big build-ups for construction companies, as well as materials and equipment suppliers.Technology
The Biden administration sought to loosen Big Tech’s stronghold by launching a series of antitrust suits against huge players such as Apple, Amazon, and Alphabet (the parent company of Google). The Department of Justice is now taking legal action to have Google broken up.During an interview, Trump expressed moving away from such a move and instead making Google “more fair.”
So Trump is expected to be a bit less aggressive with Big Tech, at least from a business standpoint.
In addition, the president-elect has the backing of one of the biggest names in tech: Elon Musk. Trump has assigned Musk to co-head the Department of Government Efficiency (DOGE), which aims to cut $2 trillion from the annual federal budget.
Trump’s push for innovation, deregulation, and tax cuts could mean soaring returns for the tech industry.
In particular, the president-elect aims to cut the corporate tax rate for domestic production to 15 percent. He could also extend major provisions of the 2017 Tax Cuts and Jobs Act, which would need to be approved by Congress before a set expiration at the end of 2025.
With that said, many of Trump’s policies remain uncertain. It is always a good idea to do your due diligence whenever you make an investment decision, or seek the guidance of a qualified investment adviser.
