Wall Street is already betting on stocks that could benefit from former President Donald Trump’s return to the White House.
Trump’s social media platform (DJT) isn’t the only stock to surge after an assassination attempt on the Republican nominee and a damaging debate for Democratic President Joe Biden, which political analysts say have increased the odds of a Republican victory.
Trump has been forceful in suggesting which industries he would prioritize if elected in November.
“Train up, baby, and close our borders,” Trump said at the Republican convention Thursday night.
Private prisons
Private prison businesses have seen strong growth over the past month, given Trump’s tough stance on illegal immigration and increased border patrols.
Shares of GEO Group (GEO), a Boca Raton, Florida-based company that invests in private prisons, have risen more than 28% over the past month.
CoreCivic (CXW), formerly Corrections Corporation of America, owns and operates private prisons and detention centers in the United States. The stock is up more than 27% in the past month.
Energy
Trump 2.0 would likely mean fewer restrictions on permits and drilling.
“Republicans have a plan to bring prices down and bring them down very, very quickly by reducing energy costs,” Trump said at the convention.
It’s worth noting that geopolitical risks and supply and demand can play a larger role in the performance of energy stocks. Jared Blikre, a statistics expert at Yahoo Finance, points out that during the Trump administration, the S&P 500 Energy Select ETF (XLE) fell 56% due to the drop in oil demand during the pandemic.
In contrast, the XLE has soared 218% since the start of Biden’s presidency, with majors posting record profits as Russia’s invasion of Ukraine sent crude futures soaring.
Business costs, including permitting costs, could fall under Trump, making oil companies more profitable, said Matt Stephani, president of Cavanal Hill Investment Management. However, the strategist doesn’t think that will lead to an increase in supply.
“I don’t think oil companies have any incentive to increase production,” Stephani said. “The industry has consolidated and focused on profits rather than growth.”
According to the strategist, a Trump presidency “is likely positive for energy stock valuations as investors bid up terminal value – that is, oil doesn’t become obsolete as quickly as some feared.”
Oil and gas producer ExxonMobil (XOM) and natural gas supplier EQT Corporation (EQT) are among the stocks that should benefit from the Trump campaign’s intention to lift the pause on new liquefied natural gas export licenses, Evercore ISI analysts note.
Coal producer Peabody Energy (BTU) and steelmaker Nucor (NUE) have seen their shares rise on prospects for higher U.S. manufacturing output. Both companies are up about 7% since the presidential debate in late June.
Electric vehicles
At the Republican convention, Trump stressed his intention to roll back Biden’s clean energy initiatives, particularly electric vehicles.
“I will end the electric vehicle mandate on day one, saving the American auto industry from complete destruction,” Trump said Thursday.
While the former president has been tough on electric vehicles, some analysts say Tesla (TSLA) could be an exception.
Trump 2.0 could be “potentially beneficial given Musk’s close relationship with Trump,” Evercore ISI political analyst Sarah Bianchi said in a recent note.
Wedbush’s Dan Ives believes that “Tesla has unmatched scale and reach” in the electric vehicle industry, even in an environment without subsidies.
The analyst also said that rising Chinese tariffs would “continue to deter cheaper Chinese EV players” from flooding the U.S. market in the years to come.
Bitcoin and Cryptocurrency Stocks
Bitcoin (BTC-US) has risen about 10% since the July 13 assassination attempt, hovering around $65,000 per token.
Trump’s support for cryptocurrency is a shift from his stance when he was president. In May, Trump’s campaign said it would begin accepting bitcoin donations.
The former president is scheduled to speak at the Bitcoin conference in Nashville, Tennessee, on July 27, marking a pivotal moment for the cryptocurrency industry.
Cryptocurrency proponents have also pointed out that Trump’s running mate, JD Vance, is a bitcoiner, judging by the Ohio senator’s financial disclosure for last year.
Over the past 10 days, cryptocurrency-related stocks Riot Platforms (RIOT), Microstrategy (MSTR) and Coinbase (COIN) have climbed 35%, 21% and 16%, respectively.
Financial Values and Mergers and Acquisitions Stocks
Banks, particularly regional ones, are likely to benefit from a Trump victory given the expectation of “less stringent regulation on bank capital and liquidity,” according to Evercore ISI’s Bianchi.
Investors also expect changes at the Federal Trade Commission and the Justice Department’s antitrust division under a Republican presidency.
“The climate will be much more conducive to M&A,” Isaac Boltansky, BTIG’s director of policy research, told Yahoo Finance last week.
Shares of Lazard (LAZ), Moelis (MC) and Evercore (EVR), financial firms that provide mergers and acquisitions services, have all risen by double-digit percentages since the June 27 presidential debate.
The Trump administration may also seek to drop the Justice Department’s antitrust complaint against Live Nation (LYV). Shares of the entertainment company have risen more than 5% since late June.
Freddie Mac and Fannie Mae
Government-backed mortgage lenders Fannie Mae (FNM.SG) and Freddie Mac (FHL.SG) have long been Trump’s targets for privatization. The two companies finance about half of all U.S. mortgages.
“There will be a lot of pressure to get Fannie Mae and Freddie Mac out of conservatorship. This is something that not only Donald Trump has focused on, but the entire Republican Party,” BTIG’s Boltansky told Yahoo Finance in a recent live interview.
Freddie Mac is up more than 60% year-to-date. Shares are up more than 6% in the past month. Fannie Mae shares are up 34% year-to-date and more than 7% in the past month.
Ines Ferre is a senior economics journalist for Yahoo Finance. Follow her on X at @ines_ferre.