(NewsNation) — Stocks soared to record highs after Donald Trump won reelection, but some sectors are climbing faster than others.
Investors have been particularly bullish on credit card companies, banks and private prison companies since Trump’s win. Elon Musk’s Tesla and Trump’s own social media company have also seen shares surge.
The Russell 2000 index of smaller stocks has shot up as well, rising faster than the big stocks in the S&P 500. That suggests investors are especially optimistic about companies that are seen as more domestically focused.
It’s worth noting that the postelection stock market bump isn’t unusual. Markets hate uncertainty, and electing a new president ends months of speculation, regardless of which party wins. However, it’s clear that investors believe some industries will benefit more than others under a Trump administration.
On Friday, the S&P 500 crossed 6,000 points for the first time ever and is up 3.7% since Tuesday’s election. Here’s where investors are placing their bets after Trump’s victory.
Bank stocks surge on hopes of deregulation
Bank stocks led the market higher on Wednesday, with financial stocks seeing the biggest gain among the 11 sectors that comprise the S&P 500.
JPMorgan Chase, the nation’s largest bank, saw shares rise 11.5% Wednesday. Goldman Sachs ended the day up 13%. Part of the rise is based on hopes that a Republican White House will lead to less regulation.
“We are confident that the regulatory pendulum will swing back somewhat,” Mark Fitzgibbon, an analyst at Piper Sandler, said in a note reviewed by Bloomberg.
Shares of credit card companies like Discover Financial Services and Capital One also popped on expectations that a proposed merger would move forward under Republican leadership.
“The M&A landscape for banks may benefit with shorter approval timeframes,” Morningstar DBRS wrote in a note reviewed by Reuters.
Private prison stocks jump on odds of Trump immigration crackdown
Shares of GEO Group Inc. and CoreCivic — companies that manage private prisons and detention centers — surged Wednesday on expectations that Trump will detain more migrants who enter the country illegally.
“We expect the incoming Trump administration to take a much more aggressive approach regarding border security, as well as interior enforcement, and to request additional funding from Congress to achieve these goals,” Greg Zoley, executive chairman of GEO Group Inc., said on an earnings call this week.
Zoley added: “We stand ready to provide additional services and resources to help ICE meet its future needs.”
Elon Musk wins as Tesla shares soar
Billionaire entrepreneur Elon Musk was one of Trump’s most vocal supporters on the campaign trail, and investors are betting Musk’s businesses will benefit from Trump’s win.
Tesla shares jumped nearly 15% on Wednesday, while shares of rival electric vehicle companies fell.
There are a few reasons for that.
For one, if Trump follows through on his plan to impose more tariffs on China, then that lowers the chances Chinese EVs will flood the U.S. market. Meanwhile, if Trump reduces the green energy subsidies that Biden put in place, it could have a greater impact on smaller companies rather than Tesla.
“Tesla has the scale and scope that is unmatched,” Wedbush analyst Dan Ives said in a note to investors reviewed by The Associated Press. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Crypto stocks jump as bitcoin hits all-time high
Trump has promised to make America the “crypto capital of the planet,” so it’s no surprise that shares of companies in the crypto industry have skyrocketed.
Coinbase, a cryptocurrency exchange platform, has seen its stock price jump 35% since Tuesday’s election.
“No matter how you slice it, this election was a huge win for crypto,” Coinbase CEO Brian Armstrong said in an X post.
Armstrong added: “DC received a clear message that being anti-crypto is a good way to end your career, as it doesn’t represent the will of the voters, who are disaffected by the current financial system and want change.”
Bitcoin, the first cryptocurrency and still the most commonly traded, hit a new all-time high of $77,000 on Friday. That’s more than double the value a year ago.
The Associated Press contributed to this report.
