Donald Trump's rapid confirmation as the next US president has boosted stocks and assets that are seen as favourable to his administration. Crypto hit a record high, Tesla (TSLA) shares were up by 13% as Elon Musk was the single largest donor to Trump's campaign and even Trump Media (DJT) soared despite weak quarter earnings.
His "America First" agenda is set to bolster traditional industries such as construction, infrastructure, and energy.
AJ Bell investment director Russ Mould said: “The policies espoused by Donald Trump during the campaign are generally seen as inflationary, thanks to tariffs and onshoring, pro-growth, and as adding to the already burgeoning federal deficit, thanks to proposed tax cuts.
"How these policies affect the economic backdrop is likely to be one key driver of US stock market returns in the next four years, but the starting point (from a valuation perspective) is likely to be another."
With investors wondering what the 60th ballot in US history will mean for them, history shows that the American equity market does tend to put in a "fairly pedestrian performance" during the first year of a Republican presidency, with an average advance of just 2%, Mould added.
Here are the stocks that stand to gain under a Trump 2.0 administration:
Trump is expected to strengthen US defence capabilities, potentially benefiting companies in this space. The VanEck Defense ETF (DFEN.MU), which holds a majority of its assets in US defence contractors, could see increased interest.
“Its portfolio includes American government and military contractor Booz Allen Hamilton (BAH) which is an intelligence specialist; Palantir Technologies (PLTR) which helps the US army with data insights; and Leidos (LDOS) which supports homeland security and is active in weapons systems research and development,” Dan Coatsworth, investment analyst at AJ Bell, said.
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Stocks such as Lockheed Martin (LMT) and Northrop Grumman (NOC) could benefit from increased defence spending.
A Trump 2.0 administration should favour domestic fossil fuel producers as he aims to enhance America's energy security.
“A Trump election victory could also create a tailwind for domestic fossil fuel producers in an effort to fortify America’s energy security. Approximately two thirds of exchange-traded fund iShares Oil & Gas Exploration & Production (IOGP.AS) is held in US-listed assets, including a stake in EOG Resources (EOG) which is one of America’s key oil and gas players, Coatsworth said.
Trump is also likely to prioritise increased domestic oil and gas production, positively impacting stocks like Exxon Mobil (XOM) and Chevron (CVX).
“A Trump win could bring Exxon Mobil regulatory relief, including relaxed environmental restrictions and lower corporate taxes, both of which could enhance profitability and support increased domestic production, Kathleen Brooks, founder of Minerva Analysis, said.
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“Exxon’s financial strength is a key differentiator. With a strong balance sheet and substantial free cash flow, it has the firepower to maintain its dividend payments and continue its stock buyback programs. Though nothing is guaranteed,” she added.
Companies such as Geo Group (GEO) and CoreCivic (CXW) may benefit from increased demand for detention facilities amid a crackdown on immigration.
GEO and CoreCivic oversee only about 9% of the US prison population, allowing for potential growth. Shares in GEO Group rose by 24%, and CoreCivic by 15%, in the last month.
Also, stocks of firearm manufacturers like Vista Outdoor Inc. (VSTO) and Smith & Wesson Brand Inc (SWBI) could reap benefits as Trump returns to the White House.
Trump’s ambition to make America the "crypto capital of the planet" has led to significant movements in the cryptocurrency market.
Bitcoin prices surged over 8% to trade around $74,200 (£57,422) per token, surpassing its previous record of approximately $73,750 set on 14 March as Donald Trump declared victory in the US elections.
"Bitcoin has also rocketed to a record high as crypto fans expect a more supportive regulatory environment," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
With Trump in the White House, markets expect a continuation of the deregulatory trend established during his previous administration. This might benefit large financial institutions such as JPMorgan Chase (JPM), Bank of America (BAC), and Citigroup (C), as reduced regulations could enhance profitability and spur lending activity.
“The Biden administration wanted the largest banks in the US to hold more capital in reserve, to cushion them against potential losses in the event of any setbacks.
“Those extra capital requirements may not be required under Trump, effectively meaning banks would have fewer constraints and be able to use more cash for lending or share buybacks.
“When you factor in the potential for looser regulations, lower corporate taxes potentially leading to higher business investment, and the prospect of interest rates staying higher for longer which is good for lenders, it’s easy to see why the outlook for the banking sector is more encouraging under Trump.
“Citigroup has interests in retail, commercial and investment banking, potentially making it well placed to benefit from any uplift in activity," Coatsworth said.
For the auto sector, producers with strong exposure to the domestic market (Ford (F), General Motors (GM) are preferable.
In the EV segment, Tesla (TSLA) surged on the back of strong support from Elon Musk for Trump's election campaign.
The 13% increase has added about $113bn to Tesla's valuation, taking its total market capitalisation to nearly $900bn.
Musk has been a prominent supporter of the Republican candidate in the presidential race and is expected to become a prominent adviser to the president elect.
He supports Trump’s plans to loosen regulations which he thinks have held back the expansion of his SpaceX project and self-driving taxis.
Companies like Trump Media & Technology Group (DJT) and Phunware (PHUN) have surged as Trump is re-elected.
Shares of Trump Media & Technology Group jumped more than 20% as Trump returns to the White House. The stock, seen as a market proxy for the former president, rallied despite a surprise earnings statement after the bell.
Read more: How investors can navigate the US election results
For the second quarter, Trump Media reported a loss of $16.4m and revenue of $837,000. The company has a market capitalisation of around $6bn.
Trump took to the stage in Florida to declare victory in the early hours in the morning, declaring that he had won an “unprecedented and powerful mandate”.
For FTSE 100 investors, Ashtead (AHT.L) is one UK stock to keep an eye out amid hopes US revenues at the British firm would be boosted following the historic re-election of Trump as president.
The equipment rental company, which has considerable exposure to the US through American arm Sunbelt.
"Construction equipment rental group Ashtead is a perfect match for Trump’s vision of blue-collar workers earning a steady salary in America. A lot of people will have voted for Trump in the belief he is good for the jobs market, ensuring that construction and manufacturing businesses have better prospects.
“Ashtead rents out machinery and tools needed to build homes, offices and factories, while also supplying the equipment needed to fix what’s already there," Coatsworth said.
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