When the presidential election comes around every four years, politics dominates the headlines -- and the stock market. The final results, however, matter more for specific sectors than for the whole S&P 500.

While it's easy to let politics get in the way of successful investing, it's important to remember that the stock market generally goes up, no matter who wins the election. "I wouldn't hide in the bunker because you're worried that Trump's going to win or Harris is going to win," says Brian Krawez, president of Scharf Investments. "The reality is the sun is likely to come up tomorrow and stocks over the long term will be a good place to be."

Individual sectors, however, could be a different story. Trump's and Harris' policies could impact healthcare, energy, banks, and other industries in very different, and not always obvious, ways. Here's the outlook for six key sectors, along with the stock performance of each during the past two administrations.

Cars

Trump: +9.9% Biden: -8.4%

There are few winners in car stocks in 2024. Ford Motor is off 16%, Chrysler owner Stellantis is down 42%, and even Tesla, which is up 1% in 2024, is trailing the S&P 500 by about 19 percentage points. General Motors, up 41% in 2024, has been the lone winner, thanks to a stable business and massive share repurchases.

Little of the underperformance is due to the elections. Investors have been worried about slowing electric-vehicle sales growth, falling new car prices, rising incentive levels, high dealer inventories, and slowing production growth. All of those headwinds will remain no matter who takes over the White House.

That doesn't mean the election doesn't matter. A Harris win likely means business as usual, with no big changes to emissions policy or EV tax credits, while Trump would almost certainly eliminate those incentives, leading to slower electric-vehicle sales growth, according to BofA Securities analyst John Murphy. Trump has also threatened higher tariffs, including on products from Mexico, where many cars sold in the U.S. are built.

Trump's policies would be positive for GM and Ford. Both companies sell a lot of gas-powered vehicles and make a lot more money selling traditional cars than EVs. Ford, in particular, is well positioned for a second Trump term because it has less exposure to Mexican production than GM or Stellantis, according to Wolfe Research analyst Emmanuel Rosner.

Tesla could be a big winner regardless of who wins the election, Rosner says. It will continue to benefit from EV-friendly policies if Harris wins, but would benefit from having no manufacturing in Mexico and Musk's potential influence in a Trump administration.

Whatever happens, investors should remember that a lot more than presidential politics determines what car companies earn and what investors will pay for their stocks. -Al Root

Energy

Trump: -40% Biden: +105%

Everyone knows how energy stocks will react to the election. Donald Trump wants to unleash more oil drilling in the U.S., so a Trump victory would likely cause an immediate knee-jerk rise in oil stocks. Similarly, a Harris victory would lift solar, wind, and electric-vehicle names.

Still, several analysts think a Trump administration could be a net negative for oil and natural gas because of Trump's plans to impose tariffs. Oil is now the U.S.'s No. 1 export. The trade war in Trump's first term led to a temporary decline in U.S. crude exports to China after China imposed retaliatory tariffs on U.S. petroleum. Oil exports to China have since rebounded, but another trade war could have a significant impact.

For investors in fossil fuels, it pays to be cautious ahead of the 2024 election regardless of who wins. Globally, there's simply too much being produced and not enough demand growth right now, and U.S. production will probably grow under either Trump or Harris. Oil is expected to stay weak, absent a geopolitical shock like an escalation in the conflict between Israel and Iran.

In terms of clean energy, Harris would be more supportive of clean-energy companies because she'll keep implementing the Inflation Reduction Act, which subsidizes solar, wind, battery, and electric-vehicle companies. Trump has promised to gut that act, endangering the more than $200 billion being invested in new factories to produce American-made clean-energy goods. A wholesale repeal of the IRA under a Republican Congress would also endanger nuclear energy, whose revival is dependent on subsidies in the act.

Nonetheless, some experts think clean-energy investors have grown too pessimistic, and that they should buy stocks on any election-related weakness. Morgan Stanley analyst Andrew Percoco likes solar manufacturer First Solar; renewable developers NextEra and AES; energy equipment manufacturer GE Vernova Inc.; and fuel-cell company Bloom Energy Corp. -- Avi Salzman

Healthcare

Trump: +71% Biden: +25%

Healthcare played only a modest role in the 2024 presidential race, but the outcome could have an impact on health insurers and hospital companies -- particularly the health insurers that dug deep into the Medicare Advantage program over the past decade.

This year has been something of a nightmare for the group. Patients have sought far more medical services than insurers anticipated, weighing on Humana and UnitedHealth, among others. The Biden administration has also taken a tough line on insurers offering Medicare Advantage plans, with smaller payment increases and a stringent approach to quality ratings.

A Trump victory could ease the pressure and boost stocks such as Humana, which is nearly a Medicare Advantage pure-play and whose stock is down more than 40% this year. It could also help the flagging shares of CVS Health and UnitedHealth, both of which are major players in the Medicare Advantage market. "If Trump wins, you probably want to own Medicare Advantage," says Chris Meekins, a healthcare policy analyst at Raymond James.

A Harris victory would be good news for insurers deeply involved in the health-insurance marketplaces created by the Affordable Care Act, and for the hospitals that treat their customers. Subsidies for people who buy their health insurance through the marketplaces are set to expire at the end of next year, and the Harris campaign would like to make them permanent while the Trump campaign has implied he might not.

A continuation of the subsidies would benefit an insurer like Oscar Health, Inc., which offers almost all of its plans through the marketplaces. It would also be positive for Tenet Healthcare and Hca Healthcare Inc, which run hospitals, and would have millions fewer insured patients to treat.

For the drugmakers, the election's outcome will likely be less binary. A Trump win could mean a friendlier atmosphere for mergers and acquisitions, which might smooth the path for Big Pharma and particularly for biotech. But the high cost of branded prescription drugs -- long a subject of political debate -- seems unlikely to change regardless of who wins the White House. -- Josh Nathan-Kazis

Industrials

Trump: +39% Biden: +51%

Manufacturers would prefer not to think about the election. They are having a good year, with the shares of manufacturers in the Russell 1000 up about 20% -- not including Boeing -- in line with the S&P 500. They've benefited from big technology companies spending billions on artificial-intelligence data centers, which need parts associated with electrification, and strong demand for airplanes and airplane parts.

Demand for AI and airplanes isn't likely to fall off in 2025, but a victory by Donald Trump could mean some massive headwinds for manufacturers. Trump, after all, wants to increase tariffs as a way to bring production back to the U.S. It might even work. Employment in the manufacturing sector has risen since Trump's first term, as semiconductor companies, auto makers, and battery manufacturers have expanded domestic production, and that growth has continued under Biden.

A trade war, though, would be problematic. China is a big Boeing customer, with China Southern Airlines, for example, operating about 200 737 model jets versus about 280 Airbus A320 model jets. But Boeing could be in the crosshairs if new tariffs are imposed on China. One possible outcome: "China never buys another Boeing plane," posits Vertical Research Partners analyst Rob Stallard.

What's more, any tariffs levied on European manufacturers could result in retaliatory tariffs on Boeing. AAR Corp would be less affected by a trade war since it makes planes in Mobile, Ala. Boeing doesn't make planes in Europe. Aerospace suppliers, such as engine supplier GE Aerospace , serve both Airbus and Boeing, so they should be OK.

All that comes on top of general industrial weakness, with the Institute for Supply Management's manufacturing Purchasing Managers' Index below 50 -- the level signaling contraction -- for 23 or the past 24 months. "Demand remains subdued, as companies showed an unwillingness to invest in capital and inventory due to federal monetary policy...and election uncertainty," said Timothy Fiore, ISM PMI survey chairman, in the Institute's October report.

Manufacturers will simply be happy to see the election -- and the uncertainty that comes with it -- pass. -- AR

Regional Banks

Trump: -1.5% Biden: +11%

Most banks in America are small. Of the 4,500 U.S. banks tracked by regulators, 90% are community banks, or those with less than $10 billion of assets. Dotted across the country and responsible for 60% of loans made to small businesses, they represent $2.7 trillion of the $24 trillion U.S. banking industry. Community banks and regional banks, their larger counterparts, make up an important swath of the financial services sector, one where the outcome of the 2024 U.S. presidential election will reverberate strongly. That's particularly true when it comes to merger-and-acquisition activity among banks and widely debated rules on customer charges known as junk fees.

“The election will almost certainly be highly consequential for regional and community banks,” says Dennis Kelleher, chief executive of the nonprofit advocacy group Better Markets. 

Consider M&A. No proposed mergers have been formally denied since a Biden administration directive three years ago pushed bank regulators to better scrutinize mergers, but the length of time it takes to approve those deals has increased “markedly,” according to Fitch Ratings analysts—“to the point of making deals nonviable.” A Harris win would likely mean a continuation of the status quo. Under Trump, that pace could pick up because he would likely push to loosen financial regulations and ease the dealmaking scrutiny. Increased consolidation under another Trump presidency—with a Congress that is either split or Republican-controlled—would boost regional banks, says Wolfe Research strategist Chris Senyek.

Smaller banks are also concerned about the regulation of junk fees—charges that appear obscured, surprising, or excessive to consumers. Biden and other Democrats have “crusaded” against those charges, “meaning regional banks likely view Republicans more positively from this perspective,” says Maoyuan Chen, a regional bank analyst for Morningstar.

Better Markets’ Kelleher, however, contends that Democrats will create a better environment for smaller banks, particularly relative to their larger competitors. “Trump favors the biggest banks, on Wall Street in particular, with dangerous deregulation and other policies that enable unfair competition against regional and community banks,” he says. 

We’ll let the market decide. –Rebecca Ungarino

Technology

Trump: +177% Biden: +95%

The tech sector has been in the crosshairs of regulators for years now. Lina Khan has spent much of her time as chairwoman of the Federal Trade Commission focusing on competition within tech, a complex issue that hasn’t always squared with existing case law. The Department of Justice has also gone after big targets in tech, recently resulting in a U.S. District Court ruling that Alphabet’s Google unit held an illegal monopoly in internet search.

“The threat of antitrust really does increase the amount of uncertainty around a particular stock, or a particular company, and we think you can put a cap on valuation multiples as a result of that,” says Dave Smith, executive vice president and head of tech investing at investment manager Bailard.

Change may be coming. Khan, who was appointed by President Biden, isn’t guaranteed to return. As president, Harris has said she would seek to balance competition and innovation with a “New Way Forward” strategy that would “encourage innovative technologies like AI and digital assets while protecting our consumers and investors.” A Trump campaign platform says his administration would “cut costly and burdensome regulations.” Neither campaign document offers specifics on antitrust policies around tech.

The semiconductor industry has become a focus of U.S. lawmakers in recent years. In 2022, Congress passed the bipartisan Chips Act to increase chip manufacturing in the U.S. The Biden administration has also put restrictions on exporting chips to China, with a focus on national security and bolstering U.S. competition. Strengthening U.S. chip products has garnered support on both sides of the aisle.

“Both Trump and Biden pursued similar policies toward the chip industry as president,” says Chris Miller, author of Chip War: The Fight for the World’s Most Critical Technology. “I expect the next president will do the same.” –Angela Palumbo