The 2024 U.S. Presidential election drew historic voter turnout, with over 63% of Americans heading to the polls on November 5th. Just a day later, Vice President Kamala Harris conceded to President-elect Donald Trump, setting the stage for a new chapter in American politics. But as Americans and international markets alike began to digest the news, Wall Street’s reaction was swift and unpredictable.
Election seasons are known for stirring market fluctuations, but the post-election period often offers a more telling story. Investors, analysts, and everyday Americans are now watching closely to see how financial markets will navigate the policy shifts and economic priorities of a Trump administration.
Initial Market Reaction
“It has been nearly a month since election season concluded and the nation selected President-elect Donald Trump,” says George Kailas, CEO of Prospero.ai. “As investors anticipated policy shifts and economic priorities, the stock market reacted with heightened volatility. While short-term fluctuations are common, the long-term impact is more dependent on broader economic trends rather than the political party in power.”
In the days following the election, the initial market reaction was mixed. While some sectors saw short-lived gains amid speculation of favorable corporate policies, broader market indices exhibited signs of uncertainty. Historically, the market often rallies post-election as the outcome becomes clear, but this time, the response was far from straightforward.
Weeks After the Election: The Cooldown Effect
As the initial excitement of the election subsided, the market began to show signs of cooling off. “A few weeks post-election, the stock market took a bit of a downturn as the frenzy and excitement of the election concluded,” says Kailas. “Two weeks after the election, the Dow Jones Industrial Average fell 0.70%, followed by the S&P 500 and NASDAQ, each slipping 1.32% and 2.24% respectively.”
These declines reflect a classic “buy the rumor, sell the news” scenario often observed in financial markets. Investors, fueled by pre-election speculation, poured money into potential “winners” under a Trump administration. But once the reality of policy formation and legislative hurdles set in, profit-taking naturally followed.
“This reflects an understandable disconnect between initial excitement and policy,” Kailas explains. “The prior Trump administration was highly friendly to the stock market and it is more than fair to expect that again as he has called that out as an important benchmark.”
Sector Winners and Losers
While the broader indices have experienced turbulence, certain sectors are viewed as clear winners under the incoming administration.
“We do think there are some expected winners that are too obvious to ignore like Coinbase and Tesla,” says Kailas.
The reasoning behind these picks is clear. Trump’s previous presidency was marked by deregulatory efforts and tax cuts that benefited high-growth sectors, particularly tech and cryptocurrency. Coinbase, as one of the world’s leading cryptocurrency exchanges, could benefit from a renewed focus on financial deregulation. Meanwhile, Tesla’s ties to the clean energy movement might face some policy headwinds, but its stature as a market leader in electric vehicles (EVs) puts it in a favorable position regardless of federal policy changes.
On the other hand, sectors like renewable energy and healthcare may face increased scrutiny. Given Trump’s prior stances on environmental regulations, the clean energy sector—which saw growth under the Biden administration—could encounter fresh challenges. However, this doesn’t mean the sector will grind to a halt, as global momentum around sustainability continues to grow regardless of U.S. federal policy.
What’s Next for the Markets?
With Inauguration Day approaching, market participants are bracing for additional volatility. As new administration officials are announced and policy outlines become clearer, investors will look for signals on tax policy, infrastructure spending, and regulatory priorities.
Historically, the first 100 days of a new administration are closely watched as a bellwether for market direction. If Trump’s previous tenure offers any clues, sectors like finance, big tech, and defense may see renewed strength. However, there’s always the wildcard factor—unexpected geopolitical events, Federal Reserve actions, or unforeseen policy pivots—that can send markets reeling.
For George Kailas and the team at Prospero.ai, monitoring the markets post-election isn’t just about tracking numbers—it’s about staying ahead of shifts in sentiment and macroeconomic forces. “The state of our economy was of high importance to many voters this election cycle,” says Kailas. “So, our team will keep a close eye on how the election continues to impact the markets. Especially after Inauguration Day.”
One month after the 2024 U.S. presidential election, the market’s response remains a story of initial optimism followed by measured caution. While some sectors, like cryptocurrency and EVs, are seen as early winners, others are bracing for potential disruption.
The upcoming inauguration of President-elect Donald Trump will mark the next critical checkpoint for market participants. Investors will be looking for clarity on tax cuts, deregulation, and infrastructure spending—all of which have historically moved the market.
As George Kailas puts it, “While that sounds exciting to companies hoping to save a couple of dollars, it isn’t a great deal for the employees who are now without work.” Investors, workers, and policymakers alike will be watching closely to see how this new era of U.S. leadership shapes the economy—and the markets—in 2025 and beyond.