By Ankika Biswas and Pranav Kashyap
(Reuters) – Just days ahead of the Nov. 5 presidential election in the U.S., investors are trying to gauge how stock markets will react as polls and betting platforms point to a tight race between Vice President Kamala Harris and former President Donald Trump.
Harris’ lead over the Republican has dwindled to a single percentage point in the final stretch of the presidential contest, according to a Reuters/Ipsos poll published on Tuesday.
A majority of a dozen analysts that Reuters spoke to expect a Trump return to boost equity markets, with some favoring a split government.
Crypto stocks and small-caps have gained in the lead up to the election.
Trump’s pledge to cut corporate taxes and decrease regulations could boost markets in the short-term if he wins, said Bel Air Investment Advisors Chairman Todd Morgan.
On the other hand, Trump has promised to double down on trade tariffs, especially against China, and “rescind all unspent funds” under a signature Biden-Harris climate law that includes hundreds of billions of dollars in subsidies for electric vehicles, solar and other clean energy technologies.
A divided Congress may be the best outcome as it limits what the president can accomplish and spend, according to Brian Klimke, chief market strategist at Cetera Investment Management.
Here’s a list of stocks and sectors that could move on the election outcome:
BANKS: A Trump win or Republican sweep could lift Wall Street banks such as JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC) on improved domestic investment, looser regulations, domestic job additions and tax cuts, Bank of America analysts said.
However, concerns around a wider trade deficit and tariffs are viewed as negative for the sector.
M&A beneficiaries include Goldman Sachs (GS), Morgan Stanley (MS), Lazard (LAZ) and Evercore (EVR) amid a more lenient approach to antitrust regulation enforcement.
CRYPTO: A more “receptive” regulatory approach to digital assets under a Trump win could benefit crypto stocks, according to TD Cowen analysts who highlighted the likelihood of the former president naming a pro-crypto SEC chair.
MicroStrategy (MSTR), Riot Platforms (RIOT), MARA Holdings (MARA), Hut 8 (HUT) and Bit Digital (BTBT) climbed between 3.4% and 45% in October.
ENERGY: Morgan Stanley analysts believe a Trump presidency could prioritize reducing the regulatory burden on domestic oil and gas production, while considering the possibility of more restrictive trade policies.
