Trump’s Return to Power: Market Winners and Losers at a Glance

Trump’s Re-election: A Mixed Bag for Global Markets
Donald Trump’s return as the 47th US president marks a significant shift in global markets, with a strong reaction to his expected policies. While some sectors stand to benefit from his protectionist, pro-business stance, others are bracing for impact, particularly those reliant on green energy and international trade. Investors are adjusting quickly to the new administration’s approach, which centers on tax cuts, trade tariffs, deregulation, and fiscal spending.

Winners: Small-Cap Stocks, Russian Assets, and Crypto
Small-Cap Stocks and US Banks
Trump’s pro-business agenda and protectionist trade policies are expected to benefit US small-cap companies, especially in manufacturing. The Russell 2000 index, tracking small-cap stocks, surged by 6% following his victory, with domestic producers set to gain from higher tariffs on imports. This theme extends to US banks, such as Wells Fargo, Citigroup, and Bank of America, which saw substantial pre-market gains (around 8%). Trump’s policies are anticipated to increase trading revenues and widen interest margins, boosting profits for Wall Street’s largest financial institutions.

Russian Assets
Markets are betting on a potential thaw in US-Russia relations, with Trump likely to ease sanctions. This shift sent Russian stocks, including Gazprom and Sberbank, higher by 3-4%. The Moscow Stock Exchange (MOEX) index also gained 3.3%, outperforming European markets.

Tesla and Bitcoin Surge
Trump’s pro-business and anti-regulation stance has sent stocks in Tesla and the cryptocurrency market soaring. Tesla shares gained 4%, as higher tariffs on Chinese and European EVs are expected to shield the company from international competition. Meanwhile, Trump’s support for deregulation has driven Bitcoin to an all-time high, rising nearly 8% to $75,000, as investors anticipate a more favorable regulatory environment for digital assets.

Losers: Green Energy, Chinese Exports, and European Manufacturers
Green Energy Stocks and Chinese Exports
Trump’s victory is a major blow to the green energy sector. Companies like First Solar, Enphase Energy, and NextEra Energy saw significant losses as investors fear reduced federal support for renewable energy initiatives. Additionally, Chinese exporters are set to face higher tariffs, with Trump promising tariffs as high as 60% on imports from China. This has already impacted BYD and the Hang Seng Index, which dropped 2.6%. Higher tariffs are likely to slow the growth of Chinese companies in the US market.

European Car Manufacturers
German automakers are feeling the heat from Trump’s protectionist trade policies. Porsche, BMW, Volkswagen, and Mercedes-Benz all saw their shares drop by up to 6.5%. Fears over increased US tariffs on imported vehicles are a major concern, which could reduce the competitiveness of European manufacturers in the US market.

The Euro and US Treasuries
The euro dropped by 1.7%, as investors flocked to the US dollar in anticipation of inflationary pressures and tighter monetary policy under Trump’s administration. US Treasuries also faced downward pressure, with the 10-year Treasury bond yields rising by 10 basis points to nearly 4.5%. Trump’s fiscal policies are expected to increase the national debt significantly, further pushing yields higher.