From Tesla to prison companies: These stocks soar from Trump win

New York
CNN
—

Former President Donald Trump’s expected return to the White House made many shareholders of publicly traded companies much richer on Wednesday.

His victory is expected to usher in sweeping changes from the Biden administration, including a tougher stance on immigration and crime, as well as a more hands-off approach to corporate regulation. It also produces significant rallies of individual stocks as well as the overall market.

It is too early to say whether the gains will last. For example, Trump has promised to impose sweeping tariffs that could significantly raise prices on pretty much anything that isn’t made entirely in the United States. That could end up hurting some of the companies that saw big gains on Wednesday.

For now, however, here are the companies that experienced some of the biggest one-day jumps after election day.

Prisons and detention centers

Companies that manage private prisons and detention centers rose on Wednesday on expectations that Trump will detain more migrants crossing into the country illegally. It would mark a reversal from the Biden administration, which allowed migrants seeking asylum to legally work in the country while awaiting trial.

Shares of two private prison operators, GEO Group ( GEO ) and CoreCivic ( CXW ), rose 42% and 29%, respectively, on Wednesday.

Elon Musk is poised to be rewarded for his multimillion-dollar donation to Trump’s campaign — and efforts to get Trump re-elected — with more favorable policies for the companies he owns, including Tesla, SpaceX, X and artificial intelligence startup xAI.

Of these companies, Tesla (TSLA) is the only one that is publicly traded. Shares of the electric car maker closed 15% higher on Wednesday, while rivals such as Rivian ( RIVN ) and Lucid ( LCID ) dipped.

Credit card companies and banks

Trump’s victory is expected to result in looser banking regulation. The Biden administration, by contrast, had pushed for stricter capital requirements aimed at protecting the nation’s biggest banks from failing in times of heightened stress. Bank executives, including JPMorgan Chase chief Jamie Dimon, strongly criticized the proposal drawn up by financial regulators.

Based on feedback he received, Federal Reserve Vice Chairman for Supervision Michael Barr, a top financial regulator leading the effort to impose higher bank capital requirements, announced that the original proposal would be revised. Still, banks have been on edge because even a small increase in capital requirements could hurt their profitability, as it means they could have fewer funds to lend.

Shares of JPMorgan Chase (JPM), the nation’s largest bank, rose 11.5% on Wednesday.

Meanwhile, shares of Discover Financial Services ( DFS ) rose nearly 20% Wednesday on expectations that its proposed merger with Capital One ( COF ), whose shares rose 15%, will sail through under Republican leadership. So far, the merger, which was proposed in February, has been delayed by financial regulators.

In general, a Trump administration is expected to be more supportive of mergers and acquisitions compared to the Biden administration, which has tried to block many.

As a result, JetBlue had pulled out of its deal to buy Spirit Airlines. But on Wednesday, shares of Spirit ( SAVE ) rose 9%, while shares of JetBlue ( JBLU ) closed 4% higher.

Trump positioned himself on the campaign trail as a pro-cryptocurrency candidate. At a bitcoin conference over the summer, he vowed to hold on to bitcoin the government seizes from criminals instead of auctioning it off, which is the current practice.

His victory on Tuesday took bitcoin to a new record high above $76,000 and sent crypto-associated stocks soaring. Among the biggest winners on Wednesday was crypto exchange Coinbase (COIN), whose shares rose 31%.

Retail trade and green energy stocks falter

However, Wednesday was not all good news for stocks.

Retailers including Five Below ( FIVE ), Wayfair ( W ) and Dollar General ( DG ), as well as toy makers Mattel ( MAT ) and Hasbro ( HAS ) all closed lower on Wednesday. Their decline is likely due to fears of Trump’s tariffs, which could mean the products they sell become more expensive since many of them are made outside the United States.

Green energy stocks saw some of the biggest declines for the day as Trump is expected to prioritize energy production from fossil fuels over other energy sources considered to be more environmentally friendly. Shares of solar panel companies Sunnova ( NOVA ) and Sunrun ( RUN ) fell 52% and 30%, respectively, on Wednesday. Trump is widely expected to repeal tax credits and other incentives that President Joe Biden pushed for in the Inflation Reduction Act.