The prospect of Donald Trump returning to the White House on Tuesday brought significant financial gains to shareholders of various companies, with several sectors seeing remarkable stock rallies on Wednesday. Trump’s policies, expected to focus on tougher stances on immigration, crime, and less regulation, led to stock surges for individual companies and the overall market. However, while many stocks surged following Trump’s victory, it remains uncertain whether these gains will be sustained, especially in light of his pledge to impose broad tariffs that could raise costs on goods produced abroad. Here’s a look at the companies that experienced significant one-day jumps after Election Day.
Prisons and Detention Centers
Private prison and detention center companies saw significant increases, with investors anticipating a shift toward stricter immigration policies. Trump’s potential approach could mean more migrant detentions, reversing Biden’s policies that allowed migrants seeking asylum to work legally while awaiting trial. The two main private prison operators, GEO Group and CoreCivic, experienced notable surges, with shares up by 42% and 29%, respectively, on Wednesday.
Tesla
Elon Musk’s support of Trump’s victory, through multimillion-dollar campaign contributions, appears to have paid off for Tesla and other Musk-associated ventures, including SpaceX, X, and xAI. Of these companies, Tesla is the only publicly traded entity, and its stock rose by 15% on Wednesday. Tesla’s rivals, Rivian and Lucid, did not fare as well, with shares for both electric vehicle companies dropping sharply.
Tesla stock surges despite Trump’s uncertain EV support
Credit Card Companies and Banks
Trump’s victory has sparked expectations of relaxed regulations for the banking sector. The Biden administration had pushed for stricter capital requirements aimed at protecting large banks from economic instability, but bank CEOs, including JPMorgan Chase’s Jamie Dimon, were critical of these proposals. Following Trump’s victory, shares of JPMorgan Chase surged by 11.5% on Wednesday, reflecting the potential for looser regulatory oversight.
Meanwhile, Discover Financial Services shares jumped nearly 20%, with Capital One shares rising by 15%, as investors anticipated smoother approval for their proposed merger under a Republican administration. Generally, Trump’s policies are seen as more supportive of mergers and acquisitions, contrasting with Biden’s administration, which opposed numerous corporate consolidations. Spirit Airlines shares rose by 9% on Wednesday, while JetBlue closed 4% higher, with hopes that a Trump administration may facilitate their stalled merger deal.
Cryptocurrency Stocks
Trump’s pro-cryptocurrency stance, expressed on the campaign trail, was another factor influencing stock market gains. Earlier this year, he spoke at a Bitcoin conference, promising to hold government-seized Bitcoin rather than auctioning it off, as is the current practice. This approach excited cryptocurrency investors and led to Bitcoin reaching a record high of over $76,000. Crypto-related stocks followed suit, with Coinbase, a major cryptocurrency exchange, seeing its shares rise by 31% on Wednesday.
Retail and Green Energy Stocks Falter
Not all sectors benefitted from the election outcome. Retail stocks took a hit, including companies like Five Below, Wayfair, and Dollar General, as well as toy manufacturers Mattel and Hasbro. Concerns over potential tariffs under Trump’s administration have raised fears that retail goods, many of which are manufactured outside the U.S., could become more costly. This led to declines in stock prices for these companies on Wednesday.
Green energy stocks also saw significant losses as Trump is anticipated to prioritize fossil fuels over renewable energy. Shares of solar companies Sunnova and Sunrun dropped sharply, by 52% and 30% respectively. Trump is expected to roll back incentives and tax credits for renewable energy projects that were introduced under the Biden administration’s Inflation Reduction Act, further dampening the outlook for clean energy companies.
As the markets continue to react to Trump’s projected return, these shifts highlight both opportunities and risks for various sectors. While some stocks are surging in response to policy expectations, others face challenges due to potential changes in trade and regulatory environments. Investors will be watching closely to see how these anticipated policy shifts impact the broader market in the months to come.
