Election Outcome Could Shape the Stock Market: Which Sectors Will Benefit Under Harris or Trump?

As the 2024 U.S. presidential election approaches, investors are closely watching how the outcome could affect the stock market. Amateur investors tend to focus on questions like “What do you think the stock market will do if Trump or Harris wins?” Serious investors are more likely to ask “With the potential for vastly different policies under Harris or Trump, which sectors may thrive or face challenges depending on the results?”

Here’s a look at how key industries could be impacted based on the election's outcome. Any companies mentioned are merely examples, and should not be construed as an investment recommendation. You should always consult with a Financial Advisor to determine if any specific security should or should not be a part of a diversified investment strategy.

A Trump Presidency: Traditional Energy, Defense, and Financial Stocks Could Surge

A Trump victory is likely to reignite support for traditional energy sectors. During his previous term, Trump rolled back environmental regulations, which helped boost the oil, gas, and coal industries. If elected, stocks in major energy companies such as ExxonMobil and Chevron could rise, along with firms providing oilfield services like Halliburton.

Defense contractors are also set to benefit if Trump returns to the White House. Known for advocating increased military spending, Trump's policies could provide a lift for defense and aerospace firms like Lockheed Martin and Raytheon.

In the financial sector, Trump's pro-deregulation stance would likely continue, potentially benefiting big banks and financial institutions. Stocks such as JPMorgan Chase and Goldman Sachs could thrive if the government loosens regulations and lowers corporate taxes, allowing banks more freedom to operate.

Trump's emphasis on domestic manufacturing and infrastructure development could also benefit industrial and construction firms like General Electric and Honeywell, while steel producers like U.S. Steel could gain from protectionist trade policies.

A Harris Presidency: Green Energy, Healthcare, and Technology Poised to Shine

If on the other hand, Kamala Harris wins the 2024 election, stocks in renewable energy, healthcare, and technology could see h3 gains. As a continuation of the Biden-Harris administration's focus on environmental sustainability, green energy firms are likely to benefit from increased government support. Solar and wind energy companies like SunPower and First Solar may see a surge, while electric vehicle manufacturers such as Tesla and Rivian could also ride the wave of climate-friendly policies.

Healthcare is another sector that could thrive under a Harris administration. Democrats are typically supportive of expanding healthcare access, and pharmaceutical companies, as well as firms providing health services, might find opportunities in this environment. Giants like UnitedHealth Group and CVS Health could be key beneficiaries.

Additionally, Harris is expected to focus on technology and communications. Tech firms involved in cybersecurity, 5G infrastructure, and data privacy—such as Alphabet and Microsoft—could see a boost as the government expands digital infrastructure.

Increased attention to education could also benefit educational technology companies like Chegg and Coursera, as Democrats continue to advocate for student loan reforms and greater investment in the education sector.

Common Ground: Tech Regulation and Healthcare Uncertainty

Regardless of the election’s outcome, certain sectors will face scrutiny no matter which candidate wins. Big tech companies like Meta and Amazon have become targets for increased regulation from both Democrats and Republicans, although the approach may differ.

Healthcare stocks, too, could face mixed prospects. While Harris could push for broader access to healthcare, Trump may focus on deregulation, creating uncertainty for pharmaceutical companies, insurers, and providers.

The Road Ahead for Investors

Political outcomes are just one piece of the puzzle for investors. While certain sectors may benefit depending on whether Harris or Trump wins, the overall economic environment—shaped by factors like interest rates, trade policies, and global market trends—will also play a crucial role.

For now, the 2024 election stands as a key date for investors looking to position their portfolios for future growth, with the potential for significant shifts across various industries based on the winner's policies. For most investors the bigger threat to their portfolio is putting too much emphasis on politics and not staying invested if their preferred candidate loses. This is one of the biggest investment mistakes I see people make. Commerce will continue, and there will most likely be stocks that go up, regardless of who wins or loses. Don’t let election results shake you out of what might otherwise be a successful long-term strategy.