A market strategist is providing insight into which sectors could benefit based on whether Donald Trump or Joe Biden wins the 2024 presidential election.
What Happened: There is a lot of focus on electric vehicles ahead of the 2024 election with a win by Trump seen as a negative for the sector, but a potential positive for Tesla.
Freedom Capital Markets Chief Global Strategist Jay Woods told Benzinga there are several sectors to watch ahead of the 2024 election.
Woods sees a potential "Trump bump" for financials and healthcare stocks if the former president returns to office.
The market strategist recalled Operation Warp Speed, which mainly focused on COVID-19 treatments, but also fast-tracked other studies.
"I think the health care sector will thrive under Trump,” Woods said. Financial regulations could be minimized under the former president, benefiting financial stocks, he added.
On the other hand, a potential 2024 election win by Biden could be good for industrials and chip stocks, Woods told Benzinga.
He said the Chips Act has been great for many semiconductor stocks and a Biden victory could continue on that momentum.
The market strategist said recent comments by Trump and his vice-presidential pick J.D. Vance could impact the chip sector with potential trade wars with China.
Why It's Important: Woods noted that investors should consider different sectors that could benefit under the 2024 election winner. The market strategist also cautioned that predictions do not always align with the actual outcomes.
Energy stocks experienced a surge leading up to Trump’s election in 2016 but did not perform as well as predicted afterward, Woods said.
"Energy didn't do as well under Trump as they thought," he added.
Electric vehicle and clean energy stocks were favored by investors ahead of the 2020 election and Biden's win. But EV stocks under Biden haven't performed as strong as expected since the 2020 election, Woods noted.
"They haven't really paid off."
The SPDR Select Sector Fund – Financial XLF and SPDR Select Sector Fund – Health Care XLV are two of the larger ETFs that track the sectors Woods predicts could do well under Trump.
The SPDR Select Sector Fund – Industrial XLI and VanEck Semiconductor ETF SMH are two of the larger ETFs that track the sectors Woods predicts could do well under Biden.
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Photo: Created using images from Benzinga and Midjourney
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