Exxon, Nvidia, and Stock Markets Brace for Impact: Trump and Biden's Battle in the 2024 Election

Investors are thinking ahead of time about a potential Biden-Trump rematch as former president Donald Trump gets closer to securing the GOP nominee.

History indicates that investors will benefit from a good pre-election year into the next one. After a gain of more than 20% in the pre-election year, Ryan Detrick of Carson Group conducted analysis and discovered that the S&P 500 has seen increases in each election year.

Furthermore, despite the fact that historically, equities have increased regardless of the party in power, a Goldman Sachs investigation revealed that, in the year preceding the general election, the tech sector often performs the poorest, while utilities and consumer staples typically do better.

Investors' main concerns in the near term are President Biden's drive for renewable energy, his assault on fossil fuels, and his intensifying tech battle with China. Aside from his promise to "drill baby, drill," Trump believes that the past president's trade plan has various effects on stock portfolios.

In November, energy policy is probably going to be a top concern for both political parties.

Energy, Trade, and Policy Perspectives

Despite claims to the contrary by those who oppose Biden's drive for renewable energy, the industry has done rather well under the present government. US oil output has reached historic highs, and Exxon Mobil (XOM) and Chevron (CVX) have announced record earnings.

However, Keith Bliss, global head of marketing and strategy at BloxCross, believes that the oil sector would benefit even more from Trump's campaign vow to deregulate energy production and eliminate the present renewable energy subsidies.

However, Bliss asserts that if President Biden is re-elected, the government will probably grow "more aggressive" and that oil majors would "struggle."

Certain businesses will have an uphill struggle regardless of the winner.

The strong positions that both Trump and Biden are taking against China might "rattle investors and corporate decision makers," China Beige Book's Shehzad Qazi said.

Investors were uneasy when Trump decided to pursue China with tariffs as high as 25% during his first term, and chip firms were targeted by Biden's measures to clamp down on China's technical breakthroughs.

While neither candidate is favorable for chipmakers like Nvidia, Portfolio Wealth Advisors president Lee Munson cautions that Trump may be a greater danger.

The large American semiconductor companies may suffer greatly under a complete prohibition. About one-third of the industry's worldwide sales in 2023 came from China, where market leaders in AI, such Nvidia (NVDA) and AMD (AMD), received at least 20% of their income.

Sales of electric cars have more than doubled since Biden entered office as automakers embraced the administration's aggressive targets for EV sales. But conventional automakers are finding the shift expensive.

In the most recent quarter, Ford (F) reported a $1.3 billion loss in its electric vehicle (EV) segment; General Motors (GM) is also losing money on its EVs.

Prior to the 2024 election, Republicans have made environmental, social, and governance (ESG)-accounting investments a primary priority.

In the past, Trump has made no secret of his disapproval of ESG programs and his support for "a law to keep politics away from Americans' retirement accounts forever."

He worked to dissuade companies from taking ESG factors into account for retirement plans in the last months of his presidency; Biden later revoked this regulation.

Fund flows have been hampered by politicians' and regulators' growing mistrust and scrutiny of sustainable funds. According to Morningstar statistics, investors withdrew $13 billion from US sustainable funds in 2023, the lowest year ever.