Some Stocks May Gain Under a Harris Administration

A leadership change at the White House may lead to new policies, which could cause specific stocks to outperform their peers.

Maintaining Policy Continuity

Recent opinion polls show the upcoming US presidential election is very close and well within the margin of error, meaning the outcome could reasonably end up in either candidate's favour. A potential Harris-Walz administration would aim to continue the policies of the Biden-Harris administration. Even the Vice President herself has acknowledged the challenges of highlighting significant differences in approach. As stock markets have generally trended upward over the past few months, a Harris victory would likely see this positive trend persist. Indeed, the definitive result of the election may prompt a "relief rally" among investors who will have certainty over the outcome.

Stating that stocks would likely rise under Harris is a reasonably straightforward assumption, given that historically, stock markets have, on average, increased under every preceding president. However, there are some potential constraints to consider, especially with respect to how control of Congress may be determined. Harris has pledged to introduce tax increases that could dampen economic growth and increase inflation, somewhat offsetting optimism around anticipated Fed interest rate reductions. Nonetheless, if Harris wins the presidency but Republicans maintain control of Congress, it is improbable that a tax plan of this nature would become law. Historically, the combination of a Democratic President and a GOP Congress has generated the strongest stock market returns among different political configurations, averaging annual gains of 11%.

Potential Beneficiaries of a Harris Win

In broad terms, analysts believe a Democrat administration could lead to lower bond yields in the short term. At the same time, industries such as renewable energy, healthcare, and housing may receive more federal support. Harris is also expected to have a less confrontational approach to China than her opponent, although Trump has already imposed tariffs. Some companies with China exposure may experience relief if the threatened significant tariffs on Chinese imports are avoided. A few companies stand out as likely to gain, nevertheless, under a Harris administration:

Organon, a healthcare firm focused on women's health, may receive extra support. The company's share price is up 21% year-to-date but has declined recently in line with the Democratic candidate's falling fortunes.

Rivian, an electric vehicle manufacturer in California competing with Tesla, could benefit from a renewed commitment to electrification. The company is still scaling up production (and faced supply issues in Q3) but relies more on subsidies due to relatively high costs. Its large debt also implies lower interest rates would be advantageous.​

Organon Pulling Back

The stock price of Organon has risen over 100% since late December after rising from $11 per share to a high of $23 in late August. It then corrected somewhat, falling back to around $17 per share, around the 50% Fibonacci retracement of the entire leg. If the trend continues upwards and the price reenters the bullish channel, prices could accelerate past the 2024 high towards $23 per share and potentially as high as $33 if bulls take over the $30 mark. Bulls will need to regain the $21 level in the short term for the upward trend to continue, just right above the $20 psychological resistance. Conversely, if the trend fails to keep advancing, Organon could slip back to the golden ratio around $15.50 per share and may eventually fall to the support of $13.50 near the 78.6% Fibonacci retracement.​

Source: SpreadEx / Organon

Key Takeaways

Potential stock market gains under a Harris administration could come from sectors like renewable energy, healthcare, and housing, which are expected to receive more federal support. Lower bond yields and a less confrontational approach to China may also provide tailwinds. Specific stocks like Organon in women's health and Rivian in electric vehicles are well-positioned to benefit from policies prioritising their industries. Maintaining the broad Biden agenda could provide continuity historically supporting markets, though tax and spending plans may face hurdles. Analysts view a modest upside for sectors and companies aligned with Democratic priorities if Harris wins.​