As the 2024 US presidential election approaches, investors are keenly watching how the potential outcomes could impact various industries.
Each candidate’s policies could create opportunities or challenges for different sectors.
Here’s a closer look at how a win by either Donald Trump or Kamala Harris might affect five key share sectors.
This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Investments and any income from them will rise and fall in value, so you could get back less than you invest.
Energy
Trump win – net positive for traditional energy
Trump's policies are likely to favour fossil fuels, promoting deregulation in the oil, gas, and coal industries.
This could lead to a surge in new drilling projects and infrastructure development, benefiting companies involved in traditional energy sectors.
However, given all that extra supply, there’s a consensus that oil prices would be lower.
Harris win – net positive for renewable energy
Harris is expected to push for an aggressive transition to clean energy.
Policies supporting solar, wind, and electric vehicle infrastructure could provide significant incentives for renewable energy companies.
However, fossil fuel industries might face stricter regulations and reduced investment incentives. Those oil majors with a stronger focus on transition technologies might be best equipped to deal with measures like this.
Financials
Trump win – net positive
Continued focus on deregulation and lower taxes under Trump could bolster large banks and investment companies.
A lighter regulatory environment might reduce compliance costs and stimulate capital markets through favourable policies.
Harris win – net negative
Harris could pursue stronger financial regulations, emphasising consumer protection and reducing systemic risk.
Increased compliance requirements could raise operational costs for large financial institutions. Proposed tax hikes on corporations and the wealthy might also impact profitability within the sector.
Healthcare
Trump win – net positive
A Trump victory could reduce government involvement in healthcare and increase deregulation.
During his first term, he tried, but ultimately failed, to make changes to the broad Affordable Care Act and the track record on pricing is mixed.
But the industry turned out to be a major beneficiary of tax changes in his time at the White House.
Harris win – net negative
Kamala Harris might advocate for drug pricing controls and an expansion of the Affordable Care Act.
While hospitals and insurance companies could benefit from more insured patients, pharmaceutical companies might face pricing pressures.
Infrastructure and industrials
Trump win – net positive for traditional infrastructure
Trump's infrastructure plans might centre on conventional projects like roads, bridges, and airports.
Companies involved in construction, industrial manufacturing, and defence could see increased opportunities and government contracts.
Harris win – net positive for green infrastructure
Harris will likely prioritise green infrastructure initiatives, investing in clean energy projects, electric vehicle charging networks, and public transportation.
Businesses specialising in sustainable technology and renewable energy could benefit from federal support, while traditional industries might face new challenges.
Technology
Trump win – net positive
A Trump administration might maintain a hands-off approach to tech regulation, which could benefit large tech companies.
However, ongoing trade tensions with countries like China and the potential for tariffs could pose risks to companies with international supply chains or markets.
Harris win – net negative
Harris could advocate for increased regulation and antitrust actions against big tech companies.
Potential measures could include breaking up monopolies or enforcing stricter data privacy laws.
While this could challenge the big tech giants, smaller tech companies might gain from a more level playing field.
The tax question
Running as an overlay to sector-specific policies are taxes, where the two parties have very different proposals.
Trump already lowered the corporate tax rate in his first term. He’s said he’ll go even further, from 21% to 15%, if elected again, which all things being equal should provide a boost to company profits.
Harris is quite the opposite, looking to raise the rate to 28% and has proposed some controversial taxes for higher earners, like unrealised gains.