Here were the top Trump trades recommended by Wall Street heading into election

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Here were the top Trump trades recommended by Wall Street heading into election

Votes for the U.S. presidential election are being counted , and the early indications point to a victory for former President Donald Trump. As of around 10 p.m. ET, Trump led Vice President Kamala Harris 201-91 in the electoral college. To be sure, there are still many key races in battleground states that are too early to call or too close to call, per NBC News. Stock futures rallied , however, with those tied to the Dow Jones Industrial Average gaining more than 500 points. Bitcoin, an asset tied to a Trump victory given the candidates courtship of the industry, soared to a record $75,000 . Heading into the election, investors and analysts pointed to several stocks and sectors that could benefit from a Trump win. Here’s a roundup of some of those: Steel stocks If Trump regains the presidency, JPMorgan expects steel stocks to outperform . “A Trump 2.0 scenario would likely bring increased use of tariffs on ******** and ********* imports among others, with the first 100 days focusing on Executive authority related to energy and deregulation along with the phased introduction of tariffs,” JPMorgan analyst Bill Peterson wrote in a note from earlier this month. “Steels … in particular should rally on a Trump victory assuming greater protectionism would be bullish for U.S. steel pricing, which is already the most attractive globally due to S232 tariffs and largely domestic footprints,” he added. “We also see further tariffs benefiting downstream aluminum players.” Related stocks that could outperform under a Trump victory include Nucor , Cleveland-Cliffs , Kaiser Aluminum and MP Materials , according to Peterson. Financials Bank of America named a Trump presidency under a split government as the best-case scenario for bank stocks. The firm cited expectations of less regulatory oversight under a Trump administration and the potential for more mergers and acquisitions across the sector. The lower probability of tax hikes under Trump would have also been more beneficial for financials, per Bank of America. Financial stocks also dominated UBS’s Trump victory stock basket . UBS highlighted more relaxed capital regulation and said investment banks would specifically outperform from more mergers and acquisitions. Among the Swiss-based investment firm’s top bank picks for a Trump win were Goldman Sachs , Citigroup and Citizens Financial . Meanwhile, Strategas highlighted Lazard as a stock that could outperform in the mergers and acquisitions space . Wolfe Research added in a Tuesday note that “under a Trump win and either GOP controlled Congress or split Congress, we expect the Fins sector to be the biggest sectoral winner by far.” Personality trades Investors have used shares of Trump Media & Technology as a possible proxy for Trump’s chances of retaking the presidency. Supporters of Trump have also used the stock as a way to invest in a Trump victory. Shares of Trump Media, the parent company of Trump’s social media platform, have soared 94% this year. However, the stock has struggled in recent weeks as Vice President Kamala Harris gained momentum with voters heading into the election. Shares of Trump Media climbed as much as 15% during Election Day, but ultimately ended Tuesday 1.2% lower after being halted during the session for volatility. The stock’s volume reached around 147 million shares on Tuesday, much higher than the stock’s 30-day average of 52.1 million. Other stocks linked to Trump include mobile software and blockchain company Phunware , which created Trump’s campaign app, and Rumble , a video platform focused on conservatives. Tesla is another potential beneficiary due to Tesla CEO Elon Musk’s close relationship with Trump, according to Evercore ISI. Cryptocurrencies A Trump presidency could potentially boost cryptocurrency-linked assets , since the former president has indicated his support for the industry. More favorable regulations could continue to boost digital currencies like bitcoin to new all-time heights . Trump may also expedite approval for cryptocurrency ETFs, which is viewed as a boost for the industry. More broadly, Trump has said he would turn the U.S. into the “crypto capital of the planet and the Bitcoin superpower of the world.” BTC.CM= 1Y mountain Bitcoin year to date. “Trump has taken a firm pro-crypto stance during his 2024 campaign, underpinned by his promise to ‘make Bitcoin great again,'” Deutsche Bank analyst Marion Laboure wrote in a research note on Monday. In the days leading up to the election, bitcoin prices jumped to a fresh seven-month high as speculation over a potential Trump win grew. “The markets will take their cue based on who wins the White House. Trump is widely seen as pro-crypto although irrespective of who wins, bitcoin is still primed for a pump,” said Nic Puckrin, CEO and co-founder of crypto education site Coin Bureau. Dollar The dollar will be critical for investors to follow as election results roll in. Investors widely expect the greenback to become stronger if Trump regains the presidency due to his protectionist policies such as tariffs. “In times of stress we go to the dollar, at least temporarily, especially if it’s global stress and even if it’s U.S.-led stress,” said Jefferies chief market strategist David Zerzos on CNBC’s “Money Movers” Tuesday morning. “That will be the most liquid and the most transparent messaging to what we are getting markets to do, because that’s where people can put money to work fast.” Investors have especially bet on the dollar-China trade as a proxy trade for a Trump win, Zerzos added. On the other hand, UBS believes that a higher dollar would be short lived. “Although the U.S. dollar could strengthen in the near term in the event of a Trump victory, we anticipate medium-term dollar depreciation regardless of the winner and suggest that investors consider using periods of strength to diversify dollar exposure toward other G10 currencies,” Solita Marcelli, chief investment officer of the Americas at UBS’s wealth management division, wrote in a note Monday. “Fundamentally we believe a combination of the dollar’s overvaluation, a shrinking yield advantage over other currencies, and the U.S.’s significant twin fiscal and current account deficits is likely to weigh on the currency regardless of the victor,” she added. Military & defense stocks Strategas believes that a Trump victory could benefit military and defense stocks such as Axon Enterprise , which provides law enforcement technologies. Trump has stressed his focus on immigration enforcement, making his concerns over undocumented immigrants and the U.S. Southern border a key issue of his campaign. Recently, Trump reiterated his pledge to “launch the largest deportation operation in the history of our country.” To be sure, “the geopolitical climate supports defense spending, regardless of the outcome,” JPMorgan analyst Seth Seifman said in a client note on Monday. Small caps Trump’s willingness to ease up on regulation and cut companies’ tax rates could give a boost to small-cap stocks. Investors have increasingly used the group to speculate on Trump’s odds of winning. The iShares Russell 2000 ETF (IWM) rallied in late June, following the debate between Trump and President Joe Biden. IWM YTD mountain iShares Russell 2000 ETF (IWM) year to date A Trump victory would also be “the biggest catalyst for sustained outperformance for small caps,” Wolfe Research said in a note on Nov. 1. Trump’s domestic-focused agenda and push for deregulation across industries would boost the confidence of small businesses, according to the firm. More mergers and acquisitions would also lift the small-cap universe higher, Wolfe Research added. Oil and Gas Energy stocks — particularly oil and gas producers — were also highlighted as beneficiaries of a second Trump presidency by Evercore ISI. More deregulation and Trump’s push toward fossil fuel production would benefit oil giants such as Exxon Mobil and Halliburton , according to the firm. Specifically, the firm said that Halliburton could benefit from “unleashing” its domestic energy capacity as the U.S.’s leading pressure pumping firm. Exxon’s strategy could receive a boost from capital flow towards more traditional energy sources. U.S.-only retailers Companies that source the largest share of their goods from outside the U.S. could be damaged by Trump’s proposed trade tariffs. Throughout his campaign, Trump has made clear his plans to enact universal tariffs as a key economic policy tool should he win office again. These would include a 20% levy on all imported goods and a 60% tariff on products made in China. ULTA YTD mountain Ulta Beauty shares year to date. On the flip side, U.S.-only retailers such as Ulta Beauty could receive a boost under these policies, according to Evercore ISI. “Trump will be positive for US-only retailers (which have higher tax rates vs retailers with int’l exposure),” the firm said. “ULTA has no sourcing from China, and operates in one of the most resilient discretionary categories.” — CNBC’s Michael Bloom, Sean Conlon, Alex Harring, Fred Imbert and Pia Singh contributed to this report.

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