So, you're looking at the political landscape and wondering where to park your cash. It's a valid question. Honestly, the market's reaction to a Trump victory isn't just about "red vs blue" anymore. It's about a very specific set of policy levers—tariffs, deregulation, and a "national champion" approach—that change the math for your portfolio. If you're trying to figure out what stocks to invest in if Trump wins, you've got to look past the headlines and into the actual machinery of the "Trump 2.0" economy.
Markets hate uncertainty, but they love a clear direction. During his second term so far, we've seen a massive shift toward domestic production. It’s basically a "buy American" mandate on steroids. If you were holding a lot of globalized tech with heavy China exposure, you probably felt the sting of the 12% to 15% effective tariff rates that have become the new normal. But for other sectors? The sky has been the limit.
The Big Banking Boom (and Why it Stuck)
Banks are arguably the biggest winners of the current administration's stance on deregulation. When Trump took office again in 2025, the talk was all about rolling back Basel III capital requirements. Investors bet that if banks didn't have to hold so much cash in reserve, they'd lend more. They were right.
JPMorgan Chase and Morgan Stanley have been standout performers. Since the 2025 inauguration, Morgan Stanley has returned about 38%, significantly outperforming the broader S&P 500. This isn't just luck. It's the result of a friendly SEC and a Treasury Department that basically said, "Go ahead, do more deals." Merger and acquisition (M&A) activity has spiked because companies aren't as afraid of the antitrust hammer coming down.
If you're looking for stability here, Bank of America remains a top pick for 2026. UBS analyst Erika Najarian recently pointed out that their valuation is still attractive despite the rally. It’s a classic play: when the rules get simpler, the big guys get more efficient.
Defense and the "Warfighter" Pivot
Defense stocks used to be a safe, boring bet. Not anymore. Trump's push for NATO members to hit 5% GDP spending—way up from the old 2% target—has sent shockwaves through the sector.
But there's a twist. It’s not just about throwing money at every contractor. On January 7, 2026, the administration issued an executive order called “Prioritizing the Warfighter in Defense Contracting.” Basically, if a company is underperforming or spending too much on stock buybacks instead of R&D, the government might pull the plug.
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- GE Aerospace: They’re sitting pretty with a massive base of 25,000 military engines.
- L3Harris: Recently surged 20% in a single month after the government invested $1 billion directly into their missile solutions business.
- Lockheed Martin: Still a titan, but they’re having to adapt to new "delivery-first" metrics.
Energy: Beyond Just "Drill, Baby, Drill"
Everyone knows Trump loves oil. But the trade isn't as simple as it was in 2016. Because US production is already so high, just "opening the taps" doesn't always help share prices—it can actually lead to oversupply and lower profits.
The real smart money has been moving into "National Champions" and unique energy plays. Look at Chevron. They have deep roots in Venezuela, and as the US tries to rebuild that country’s oil industry to redirect sales back to the States, Chevron is the primary beneficiary.
Then there's the uranium trade. With a focus on energy independence, companies like Cameco have become essential. Trump has signaled a lot of support for nuclear as a "clean but reliable" alternative to wind, which he’s been pretty vocal about hating.
The Weird World of "National Champions"
This is something most people get wrong about the current administration. Trump is increasingly using the government as a major shareholder in companies he thinks are vital for national security. This is a huge departure from traditional Republican "small government" talk.
- Intel: The government has taken a stake to shore up the domestic chip manufacturing base.
- Lithium Americas: Essential for the battery supply chain, even if the administration is cooling on EVs.
- Nucor: The steel giant is the poster child for the tariff-protected American manufacturer.
Basically, if a company helps the US stop relying on China, it’s got a "Trump Put" underneath its stock price.
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Crypto and the "New" Financials
Crypto isn't the Wild West it used to be, but it’s definitely finding a home in this administration. Bitcoin hit all-time highs recently, fueled by a sentiment that the US wants to be the "crypto capital of the world."
Coinbase has become a de facto infrastructure play. Analysts have price targets as high as $358 for 2026, assuming the regulatory environment stays sunny. It’s volatile, sure, but in a world where the dollar is being used as a trade weapon, many investors are treating digital assets as a necessary hedge.
What to Watch for the Rest of 2026
We're entering the second year of the term, which is historically a bit "meh" for stocks. The "Presidential Election Cycle Theory" suggests that after the initial honeymoon phase, markets might tread water until the midterms.
However, the 2025 tax cut extensions (the "One Big Beautiful Bill Act") have provided a nice cushion. You've got to keep an eye on the 10-year Treasury yields. If they spike back toward 5%, it’s going to put pressure on those high-flying tech valuations. But if the Fed keeps cutting rates—and Trump has been very loud about wanting lower rates—then the "everything rally" might just keep going.
Actionable Next Steps for Your Portfolio
Don't just buy the "Trump" label. You need to look at the balance sheets. If you want to align with the current trend, here is how you should think:
- Check the "Reshoring" Factor: Does the company make its stuff in the US? If yes, they might get a 15% corporate tax rate instead of 21%. That’s a massive earnings boost.
- Watch the Dividend/Buyback Ratio: For defense and tech, the government is getting picky. They want to see investment in factories, not just money handed back to shareholders.
- Keep a "Hedge" in Gold: Gold has soared 70% since Trump took office, partly because of dollar volatility and global uncertainty. Gold miners like those in the iShares Gold Producers ETF are often a more aggressive way to play this than the metal itself.
The game has changed. It's less about "free markets" and more about "managed national growth." Position yourself accordingly.
Strategic Portfolio Rebalancing:
Identify companies in your portfolio with over 20% revenue exposure to China. Evaluate if their domestic growth or potential "National Champion" status under current policies outweighs the risk of sustained 60% tariffs on their supply chains. Move toward "mid-cap" domestic manufacturers that stand to benefit most from the 15% corporate tax rate for US-made goods.