ETFs Set to Soar on Trump's Presidential Victory

The U.S. stock futures rallied on Wednesday as Republican nominee Donald trump won back the White House in the presidential race. Donald Trump won in all seven swing states as he secured a comfortable majority in the U.S. Presidential election 2024 and will be the 47th president of the United States. Republicans also won control of the U.S. Senate for the first time in four years.

The Dow Jones futures climbed 2.9%, while futures of the S&P 500 and the Nasdaq 100 Index gained 2.4% and 1.8%, respectively. As such, many sectors saw an impressive surge in pre-market trade from Trump’s victory and are expected to gain further. Below, we will discuss them and highlight some of the compelling ETF picks:

Bitcoin

The world’s largest cryptocurrency surged, topping $75,000 for the first time on Trump’s victory. Some view Bitcoin as a so-called Trump trade as he embraced digital assets during his campaign. Donald Trump is supportive of cryptocurrencies and has vowed to make the United States the crypto capital of the planet. BlackRock iShares Bitcoin Trust (IBIT Quick QuoteIBIT - Free Report) and Grayscale Bitcoin Trust ETF (GBTC Quick QuoteGBTC - Free Report) could make the most of it (read: 5 ETFs to Tap the Ongoing Bitcoin Rally).

U.S. Dollar

The U.S. dollar climbed to the strongest level in a year on the belief that Trump’s proposed tariffs against major U.S. trading partners would boost the greenback. As such, Invesco DB US Dollar Index Bullish Fund (UUP Quick QuoteUUP - Free Report) is also poised to surge. It offers exposure against a basket of six world currencies. This is done by tracking the Deutsche Bank Long USD Currency Portfolio Index - Excess Return plus the interest income from the fund’s holdings of U.S. Treasury securities. UUP has a Zacks ETF Rank #3 (Hold).

Small-Caps

Trump’s plan for lowering taxes and regulations will likely boost domestic stocks, including small caps. As such, investors should tap the opportune moment with some of the top-ranked ETFs in the space. iShares Core S&P Small-Cap ETF (IJR Quick QuoteIJR - Free Report) , iShares Russell 2000 ETF (IWM Quick QuoteIWM - Free Report) and Vanguard Small-Cap ETF (VB Quick QuoteVB - Free Report) have a Zacks ETF Rank #2 (Buy).

Banks

Banks are well-positioned to benefit from Trump’s deregulation and lower corporate tax policies. One of the most notable potential benefits for banks is Trump's focus on deregulation. During his first term, Trump's administration rolled back several regulations imposed after the 2008 financial crisis. This deregulation reduced compliance costs and increased profit margins for banks. A second Trump term could see a continuation or even an expansion of these deregulatory efforts, providing a more favorable operating environment for financial institutions. As such, bank ETFs like SPDR S&P Bank ETF (KBE Quick QuoteKBE - Free Report) and Invesco KBW Bank ETF (KBWB Quick QuoteKBWB - Free Report) are set to gain. KBE has a Zacks ETF Rank #2 while KBWB has a Zacks ETF Rank #3 (read: Trump Trade Resurgence: ETF Areas Set to Gain or Lose).

Energy

Energy is another sector that is poised to benefit under the Trump presidency. Trump emphasizes energy independence, and his policies are likely to favor fossil fuels, promoting deregulation in the oil, gas, and coal industries. He is in favor of expanding oil exploration, including increased fracking activities. To tap this trend, investors could bet on popular energy ETFs like Energy Select Sector SPDR (XLE Quick QuoteXLE - Free Report) and Vanguard Energy ETF (VDE Quick QuoteVDE - Free Report) . Both funds have a Zacks ETF Rank #2 each.