Investing.com – Evercore ISI is reevaluating the US equity market as the November presidential election approaches, following Vice President Kamala Harris taking over leadership of the Democratic Party from President Joe Biden.
The recent failed assassination attempt on Republican candidate Donald Trump before a closely contested Presidential election indicates that political uncertainty is likely to persist.
Despite Harris becoming the Democratic frontrunner and tightening the polls, Evercore ISI is maintaining its sectoral predictions for both Harris and Trump victories, as there have been few significant policy changes.
Historically, a United government has performed better than a Divided one, but the current deep political divisions suggest that in 2025, stocks may fare better under a Divided government.
In the event of a Trump/Red Sweep, sectors like Financials and Oil & Gas are expected to benefit from his deregulatory agenda. Furthermore, Defense stocks could see gains if Republicans sweep Congress due to potential increased Defense spending.
Sectors such as Autos and Agriculture are likely to suffer under Trump’s trade policies. Additionally, Evercore ISI predicts that Trump’s executive actions on immigration and tariffs could hinder US growth in 2025, with potential negative impacts on the economy.
President Trump’s proposed tax cuts, including exempting overtime pay from taxes and removing the cap on state and local tax deductions, could add significantly to the deficit. These policies could increase the total cost of Trump’s proposals to at least $9 trillion over the next decade.
Overall, Evercore ISI’s analysis provides insights into the potential market impacts of the upcoming presidential election and policy changes, highlighting sectors that may benefit or face challenges based on different election outcomes.