As a result of the US presidential election, the final months of this year could prove to be volatile for investors in the stock markets. Freedom24 analysts assess how a Kamala Harris victory and her administration’s decisions on clean energy, regulatory oversight, housing subsidies and the cannabis industry could affect stock markets.
Boom of clean energy and electric cars. A Harris win would be a boon for the renewable energy and electric car industry. Tesla, Rivian and Lucid, as well as solar companies First Solar and Enphase Energy, could benefit from continued support for Biden-era incentives for clean energy and electric vehicle infrastructure. A firm commitment to the green energy transition will propel these sectors upward, with continued investment in electric vehicle charging infrastructure and solar energy.
Win-win for developers. Harris’ focus on housing could provide a boost to developers like DR Horton, Lennar Corp and KB Home, offering $25,000 down payment subsidies to first-time home buyers and tax credits for affordable housing. If these measures are implemented, residential developers could see a strong increase in demand in 2025.
Cannabis stocks are rising. The hemp sector is likely to continue to thrive under the Harris administration. Shares of Tilray, Canopy Growth, and Curaleaf could rise thanks to continued movement toward federal legalization and industry-friendly legislation.
The financial sector is under pressure. In contrast, the financial sector may face adverse conditions under Harris – the financial sector’s performance is likely to deteriorate as regulatory scrutiny tightens. Higher bank capital requirements and tighter credit card fee regulations could weigh on shares of Bank of America, JPMorgan and Goldman Sachs.
Concern about healthcare and drug manufacturers. Harris’ plan is to cap drug prices at $2,000, which could put pressure on drug companies. Big pharmaceutical companies could reap more profits as the government tries to reduce health care costs.
During Harris’ presidency, investors can expect growth in clean energy, electric vehicles, housing and cannabis, while financial and pharmaceutical companies may face regulatory challenges. The market as a whole could respond favorably to growing sectors such as technology and renewable energy, positioning the Harris administration as the initiator and main force behind long-term infrastructure and green energy.
Regardless of who wins the election, the final months of the year are likely to be volatile for markets as investors digest political outcomes and their economic implications:
Volatility before the election results. Markets may face increased volatility ahead of November 5 as investors adjust portfolios depending on the expected winner. Expect volatility in energy, technology and defense stocks as investors brace for potential policy changes.
Post-election reaction. If Trump wins, expect a rotation in traditional energy, defense and cryptocurrency stocks, with technology and clean energy under pressure. If Harris wins, the result will be a rally in renewables, housing and cannabis, with financials and pharmaceuticals facing head-on.
While both scenarios offer opportunities for sector-based plays, investors should closely monitor political developments and remain flexible in their portfolio strategies.
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