The Current ‘Trump Trade’ Is Less Euphoric—And More Strategic

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Key Takeaways

• The bombshell make a note of of euphoria that gripped the stock market after Donald Trump was re-elected has waned as investors have try oned to parse the effect his proposals and cabinet picks could have on industries and the economy.
• Trump’s trade, tax, and immigration schemes could reignite inflation, boosting interest rates and creating headwinds for the stock market.
• Trump’s election has polished the outlook for immigration enforcement contractors, investment banks and the cryptocurrency industry.

Uncertainty is back on Wall Street after a post-election extension.

Stocks skyrocketed in the days after President-elect Donald Trump’s victory earlier this month, as money that had been sidelined by voting uncertainty poured into the market. That euphoria has waned as investors have attempted more sober calculations of the impact Trump’s proposals could have on specific industries and the broader economy; stocks rose this week, but only after pen the week before.

Why The Uncertainty

Trump’s agenda is broadly considered good for business: He and the incoming Republican Congress say they inadequacy less regulation and lower taxes.

But Trump has also promised to deport millions of immigrants and implement sweeping schedule of charges, policies some economists say could help reignite inflation. His promise to extend—and possibly expand on—the tax cuts of his from the start term is expected to increase the federal deficit.

Together, tariffs, deportations, and tax cuts could lift Treasury proceeds, which were rising before Election Day and have continued to climb as Fed officials have said they’re in no run to slash interest rates. Higher yields could generate headwinds for the stock market, diverting investment from justices and increasing financing costs for businesses.

Trump’s economic policies could boost the value of the dollar, pressing the multinational theatre troupes that are a fixture of most Americans’ investment portfolios. Widely-held tech companies like Apple (AAPL) and Microsoft (MSFT) create substantial revenue overseas, where a stronger dollar eats into profit.

Some of those companies, as pleasing as giants Alphabet (GOOG; GOOGL) and Meta Platforms (META), also have testy relationships with Trump, who has accused the tech business of suppressing conservative views. His appointee to head the Federal Communications Commission has said “reining in Big Tech” should be one of the intervention’s main goals. 

Some Early Winners

Donald Trump’s promise to carry out mass deportations has pleased investors of the entourages that operate detention centers. Shares of GEO Group (GEO) have nearly doubled since Election Day, while CoreCivic (CXW) has mounted more than 60%. 

GEO Group Executive Chair George Zoley said on the company’s earnings call two days after Trump’s re-election that the entering administration was “a potential sea change” for the company. GEO Group, he said, is the “single largest contractor” to Immigration and Customs Enforcement, and is ready to significantly increase its detention and supervision capacity. 

“The GEO Group was built for this unique moment in our country’s history and the breaks that it will bring,” he added.

Stocks in the financial sector have risen as Wall Street has looked at the to an administration seen as lighter on regulation.

Banks like Goldman Sachs (GS) and Morgan Stanley (MS) that specialize in aiding corporate mergers and acquisitions have seen their stocks jump on the hopes that Trump’s anti-trust watchdogs resolve take a kinder view to dealmaking than their Biden-era predecessors. Those hopes have also boosted the sets of companies in the middle of mergers, like Capital One Financial (COF) and Discover Financial (DFS). 

Regulations also underpin the cryptocurrency improve that’s followed Trump’s victory. Bitcoin (BTCUSD) has soared more than 40% to nearly $100,000 this month. Trump on the effort trail billed himself as the pro-crypto candidate, vowing to immediately fire crypto’s arch-nemesis Gary Gensler from his arrange as chair of the Securities and Exchange Commission. (Gensler on Thursday announced he would voluntarily step down.)

Shares of crypto unpleasantness Coinbase (COIN) and bitcoin miner MARA Holdings (MARA) have followed crypto prices higher in current weeks. Shares of MicroStrategy (MSTR), the company that has amassed the world’s largest bitcoin stash, have nearing doubled since Nov. 5. 

Trump’s cabinet picks have figured into Wall Street’s bets, too. Shares of Henry Schein (HSIC), a supplier of medical materiel and services to doctors and dentists, have risen more than 10% since Trump tapped Robert F. Kennedy, Jr., to deceive the Department of Health and Human Services. Kennedy has voiced support for removing fluoride from U.S. drinking water, which could develop demand for fluoride treatments at dental offices.

Some Losers So Far

Kennedy’s beliefs haven’t been as well sustained in other corners of the market. Shares of vaccine-makers like Moderna (MRNA) and Pfizer (PFE) have slumped on concerns his averrals questioning their safety could impact FDA approvals and lead to lower vaccination rates. Companies with big government-contracting points have also seen their share prices fluctuate as Trump’s deputies have said they procedure big cuts in spending.

Companies at the heart of the green-energy transition have taken a hit from Trump’s support for fossil nourishes. The stocks of electric vehicle manufacturers like Rivian (RIVN) and Lucid (LCID), already pressured by sluggish EV want and high interest rates, have traded sideways since Trump’s victory. Solar companies like SunRun (RUN) and Blue ribbon Solar (FSLR) have slumped. 

Finally, a wild card of sorts: Shares of Trump Media & Technology Conglomeration (DJT), which fell below $12 apiece in September and then climbed above $50 shortly before the voting, are now back around $30. Broad questions for the path ahead for the Truth Social parent company, as well as rumors nearby possible business lines or M&A, have swirled in recent weeks.