2024 Election: How a Trump or Harris Victory Could Shape the Future of AI, Energy, and Key U.S. Industries
As the 2024 U.S. presidential election approaches, the policies of Vice President Kamala Harris and former President Donald Trump present starkly different visions for the future.
Both candidates promise significant changes that will impact key sectors of the economy, and investors must prepare for the potential shifts. Here’s a closer look at how different industries and companies might fare under a Harris or Trump presidency, with a focus on the emerging impact of AI.
Kamala Harris Victory: Emphasis on Technology, Infrastructure, and AI Safety
A Kamala Harris presidency would likely build on the Biden administration’s economic policies with an even sharper focus on technology, infrastructure, and middle-class economic growth. Harris has emphasized the need to strengthen domestic industries, regulate corporate practices, and invest in underserved communities. One of the key areas of her campaign is artificial intelligence (AI) regulation and safety.
Winners:
Infrastructure and Industrial Manufacturing: Companies like Cleveland-Cliffs (CLF), Nucor (NUE), and Steel Dynamics (STLD) stand to benefit from Harris’s commitment to using American-made steel, lumber, and concrete in federally funded infrastructure projects. Her push for reshoring supply chains for critical materials would also boost these industries.
Reshoring of Supply Chains: Likely promotion of reshoring for critical materials and technologies, reducing reliance on China, could benefit industrial companies like Caterpillar (CAT) as domestic manufacturing increases.
Technology and Semiconductors: Harris’s focus on ensuring that America leads in artificial intelligence and advanced technology could favor companies like Intel (INTC) and Texas Instruments (TXN). These firms are likely to benefit from government support aimed at reducing reliance on Chinese manufacturing and enhancing domestic capabilities.
Artificial Intelligence: Harris has demonstrated a strong commitment to AI safety, emphasizing the need to regulate AI while fostering innovation. Her administration is likely to continue pushing for AI regulations that protect consumers and prevent misuse, which could create opportunities for companies like NVIDIA (NVDA). NVIDIA, as a leader in AI hardware and software, would benefit from increased demand for secure AI solutions driven by Harris’s policies.
Cybersecurity: With Harris expected to prioritize AI safety and national security, cybersecurity companies like Palo Alto Networks (PANW), CyberArk Software (CYBR), Zscaler (ZS), and CrowdStrike (CRWD) could see increased demand for their services.
Losers:
Retailers and Consumer Goods: Harris’s focus on consumer protection could lead to increased scrutiny on pricing practices, potentially hurting companies like Walmart (WMT), Costco (COST), Target (TGT), Hershey (HSY), Mondelez (MDLZ), and Kellanova (K). Her proposals to crack down on price gouging during emergencies could impact profit margins in these sectors.
Luxury Goods and High-Income Consumers: Harris’s proposal to raise the corporate tax rate from 21% to 28%, combined with new wealth taxes, could put pressure on high-end retailers and companies catering to affluent consumers. Companies like Lululemon (LULU), Ralph Lauren (RL), and Crocs (CROX) may face headwinds if consumer spending slows among their core demographics.
Donald Trump Victory: Deregulation, Traditional Energy, and Economic Populism
If Donald Trump wins the presidency, a return to policies focused on deregulation, traditional energy, and aggressive trade measures is expected. Trump’s economic strategy emphasizes energy independence, lower taxes, and tariffs designed to protect American jobs, which could reshape the competitive landscape.
Winners:
Oil & Gas: Trump’s commitment to expanding domestic energy production would benefit companies such as ExxonMobil (XOM), Halliburton (HAL), and Schlumberger (SLB). With fewer environmental restrictions and increased drilling opportunities, these companies could see a resurgence.
Defense and Aerospace: Trump’s commitment to bolstering the U.S. military would be a boon for defense contractors such as Lockheed Martin (LMT) and Northrop Grumman (NOC). Increased defense spending and new contracts could drive profitability in this sector.
Tobacco: The regulatory environment under Trump could be more favorable to tobacco companies. Altria Group (MO) and Philip Morris (PM) might benefit from reduced oversight and a rollback of nicotine content restrictions.
Domestic-Focused Retailers: Retailers with a strong domestic supply chain, like Tractor Supply (TSCO), AutoZone (AZO), and Xponential Fitness (XPOF), would likely benefit from Trump’s tariff-heavy trade policies, as they would be less affected by import costs than their globally dependent counterparts.
U.S. Car Manufacturers: With less emphasis on electric vehicles (EVs) and more on traditional automakers, companies like General Motors (GM) and Ford (F) could gain from reduced regulatory pressures and a focus on internal combustion engines.
Losers:
Retailers Dependent on Imports: Companies like Abercrombie & Fitch (ANF), Best Buy (BBY), Nike (NKE), and Costco (COST) could struggle if Trump re-imposes tariffs on Chinese goods. The increased costs could squeeze margins and lead to higher prices for consumers.
Renewable Energy: Companies such as Tesla (TSLA) and First Solar (FSLR) could face challenges if Trump reduces federal support for clean energy initiatives. The emphasis on traditional energy sources might stifle growth in the renewable sector.
Tech and Semiconductors: Trump’s aggressive stance on China and potential tech export restrictions could negatively impact companies like Nvidia (NVDA) and Intel (INTC). Stricter controls could lead to higher costs and reduced market access, particularly in Asia.
The Broader Market Impact: Congressional Control and Economic Policies
Beyond the presidency, the composition of Congress will be crucial in determining the extent to which either candidate’s policies can be implemented. Analysts predict that the Senate is likely to shift to Republican control, even if Harris wins the presidency. This scenario could moderate Harris’s ability to implement more progressive policies, such as significant tax increases or expansive social programs.
In contrast, a full Republican sweep would likely lead to more aggressive fiscal policies, including increased tariffs, stricter immigration measures, and an extension of the 2017 tax cuts. These moves could boost companies with strong pricing power and domestic operations, but might hurt those reliant on global trade and foreign labor.
Investor Takeaway: Navigating a Divisive Election
The 2024 election will likely have profound implications for various sectors and companies. A Harris presidency could continue to push for a greener, more regulated economy, benefiting infrastructure, technology, and cybersecurity while challenging consumer goods and luxury brands. A Trump presidency, on the other hand, could revive traditional energy, favor domestic-focused businesses, and bring back tariff-driven trade policies.
Investors should prepare for the possibility of significant policy shifts, focusing on companies with resilient business models that can adapt to the changing economic landscape. As Election Day approaches, understanding the potential outcomes and their implications will be key to making informed investment decisions in an increasingly uncertain environment.