Key Points
- The financial and industrial sectors are expected to benefit from the deregulation and tax cuts that Trump’s administration will implement.
- Big Tech sees growth potential with reduced regulatory pressure and increased AI investments.
- Potential tariffs and policy rollbacks could challenge automakers. Discount retailers, relying on Chinese goods, could struggle with higher import costs.
- The construction industry may encounter labor shortages and rising material costs due to tariffs and deportation policies.
As President-elect Donald Trump’s second term begins on Monday, investors are bracing for significant policy changes, including deregulation and tax cuts. These priorities have fueled optimism on Wall Street, where cooling inflation and strong corporate earnings have contributed to market gains. The S&P 500 recorded its best weekly performance since the election, rising 3.6% since November 5. However, analysts warn that Trump’s unpredictable leadership style could bring market volatility.
Financial stocks are expected to benefit as investors anticipate looser regulations and increased mergers and acquisitions activity. Major banks have reported rising profits, with Goldman Sachs CEO David Solomon noting a surge in CEO confidence following the election. JPMorgan CFO Jeremy Barnum described the current market sentiment as an “animal-spirits moment,” driven by optimism about the new administration’s policies. Analysts predict that deregulation will remove potential financial burdens and promote industry growth.
The industrial sector is also poised for gains, with analysts highlighting improved business confidence and expectations of growth in 2025. HEICO’s leadership expressed optimism about the economic environment under Trump, and Elon Musk’s influence on the administration is seen as a potential catalyst for the sector’s expansion.
The airline industry is expected to benefit from regulatory rollbacks and tax policies that favor business expansion. Executives from major airlines, such as Southwest CEO Bob Jordan, anticipate a more favorable environment for mergers and operational efficiency. Analysts suggest that Trump’s administration could support smaller airlines through mergers and acquisition opportunities to compete with larger carriers.
Big Tech also positions itself for growth, with major CEOs supporting Trump’s inauguration efforts, including Amazon’s Jeff Bezos and Apple’s Tim Cook. Analysts predict a “Goldilocks” scenario for the sector, driven by reduced regulatory pressure and increased AI investments. IBM CEO Arvind Krishna hoped the administration would foster innovation and M&A opportunities through clearer regulations.
On the downside, automakers face uncertainty as Trump’s administration plans to roll back EV policies and impose import tariffs. Industry leaders warn of rising costs and disruptions, with General Motors potentially facing significant earnings impacts from proposed tariffs. Discount retailers are also at risk due to their reliance on Chinese imports, while the construction sector faces challenges from potential tariffs and mass deportations, which could increase labor and material costs.
