Donald Trump’s victory in the US presidential election triggered a strong rally in financial markets, underscoring the impact of the so-called “Trump Trade” on stocks, despite ongoing debate around his plans for tariffs, tax cuts, and large-scale migrant deportations and their effects on the world’s largest economy.
A week later, the initial surge seems to be calming. The three major US stock indexes ended lower on Tuesday after gaining roughly 5% since 4 November, the day before the election.
Here’s a look at some of the companies and sectors that have benefitted, as investors try to anticipate what the next four years may hold.
Tesla
Tesla’s stock has surged approximately 35% since 4 November, pushing its market value back above $1 trillion for the first time since 2022 and increasing CEO Elon Musk’s wealth by over $50 billion, thanks to his 13% stake in the company.
This rally signals investors’ confidence that a Trump-led White House could ease certain safety investigations into features like self-driving. The relationship between Trump and Musk may also support Tesla’s navigation of US-China relations, essential for a company with a significant presence in China.
Although Trump is expected to reduce government support for electric vehicles, including tax credits, analysts suggest this shift could benefit Tesla as the US market leader, making it more challenging for competitors to catch up.
Cryptocurrency
Bitcoin prices have jumped over 25%, reaching new all-time highs, and briefly surged past $89,000 following Trump’s win. These gains reflect investors’ optimism for the sector, which faced increased regulation under Biden’s administration amid concerns over fraud.
Trump, who once called crypto a “scam,” recently embraced it on the campaign trail, pledging to make the US the “crypto capital of the planet.” He proposed creating a national bitcoin stockpile and replacing SEC Chair Gary Gensler, who drew criticism for enforcing existing financial laws against crypto firms.
Crypto companies argue that their industry needs custom-tailored rules, which may depend on a friendlier Congress this term.
Bank
shares of major US banks have seen double-digit gains since the election, as investors expect financial firms to benefit quickly from Trump’s promises of lighter regulation.
Trump’s input on pending regulations, such as liquidity requirements for banks, could be significant. He is also likely to replace FTC Chair Lina Khan, known for her anti-monopoly stance, which has slowed mergers—a key business area for banks.
Capital One and Discover, currently under regulatory review for a merger, have seen their shares jump over 15% since the election.
Private Prisons
Leading private prison companies GEO Group and CoreCivic have seen share prices soar roughly 70% since 4 November, highlighting investor anticipation of new opportunities in the sector as Trump commits to mass migrant deportations.
In 2021, President Biden ordered the Justice Department to end contracts with private prisons. However, Trump is expected to reverse this policy, creating new business as he seeks support for his immigration agenda. Trump’s focus on immigration policy in his initial appointments indicates it will likely be a priority.
The Dollar
The dollar index recently reached its highest level since April, with a gain of over 2% in the past week.
This development benefits Americans traveling abroad, although it presents mixed signals for the economy. The dollar’s strength is closely tied to interest rates, which investors now believe could remain higher than previously anticipated.
This trend partly reflects data indicating stronger-than-expected US economic performance prior to the election. However, concerns linger that Trump’s policies—lower taxes, reduced immigration, and trade barriers—could keep inflation high, potentially discouraging the Federal Reserve from cutting interest rates.
Last week, the Federal Reserve gave limited guidance on the future, stating it’s too early to determine the impact of Trump’s policies.
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