Stocks may be in rally mode after former President Donald Trump’s election victory, but not every sector is poised to get a lift. The major averages rallied to new highs Wednesday as NBC News projected a defeat of Trump’s rival, Vice President Kamala Harris . The Dow Jones Industrial Average surged more than 1,300 points, or about 3.1%, and the tech-heavy Nasdaq Composite and S & P 500 popped more than 2% as investors mulled over what the new administration could mean for the market. Many on Wall Street have come to view a Trump-led government as a potential boon for a range of sectors including cryptocurrencies, financials and automakers. And many companies tied to those industries gained steam Wednesday. But the outlook isn’t as rosy for some other key sectors and market themes. Clean energy One potential big loser is solar and clean energy stocks that benefited from tax credits instituted under President Joe Biden ‘s Inflation Reduction Act. Trump has already hinted at repealing the bill, which could affect the growing clean energy boom in the U.S. Goldman Sachs analyst Brian Lee views solar infrastructure and manufacturing companies as some of the biggest losers in a policy shift. This includes companies such as SolarEdge Technologies , Enphase Energy and First Solar . SEDG YTD mountain Shares this year All three stocks dropped double digits during Wednesday’s session. Lee highlighted them as among the most exposed to IRA incentives. SolarEdge shares have lost nearly 84% of their value since the start of 2024. Retailers Along with changes to clean energy, Trump has hinted at tariffs to buoy U.S. producers. Analysts view discount and specialty retailers that are reliant on products from China as some of the biggest losers under such a plan. Bank of America analyst Melanie Nuñez downgraded shares of Five Below to an underperform rating, citing its “outsized sourcing exposure” to China — which accounts for about 50% to 60% of its products. The firm does “not see a clear path to a turnaround in comps and expect continued margin deleverage on lower sales and incremental tariff costs,” she wrote. Comps, or same-store sales, are a key metric of retail sales growth. Five Below shed nearly 8% during Wednesday’s trading session, while Dollar Tree and Dollar General slumped about 8% and 4%, respectively. Yeti was another retail stock Bank of America downgraded, given that 80% of its drinkware is sourced in China, the world’s second-largest economy. Shares fell 8%. The firm also highlighted companies with greater than 20% China exposure, including Crocs and American Eagle Outfitters , as being among potential tariff losers. Alcohol stocks Americans may also want to brace for some price hikes on their favorite alcohol brands and spirits makers. TD Cowen’s Robert Moskow views Constellation Brands as a potential loser if tariffs are imposed on Mexican imports, while Brown-Forman could take a hit from a reinstated EU tariff related to American whiskey. The region accounted for about a quarter of the category’s sales, he noted. STZ 1D mountain Constellation Brands falls amid Trump tariff concerns “With a 50% American whiskey tariff, we would expect BFB to pass some cost along to the consumer, which would put additional pressure on volumes,” he wrote. Diageo may also face a combination of headwinds from a combination of levies on imports of Scotch and Mexican tequila to the U.S., and whiskey exports to the EU. Consumer staples companies such as Mondelez and Coca-Cola could also take the heat given their modest exposure to Mexico, he added. Both stocks fell about 3% on Wednesday. Hospital and health-care stocks A shifting stance toward health-care coverage could also put some pressure on hospital stocks, given the Republican Party’s “generally less supportive” efforts toward coverage, according to Bank of America’s Joanna Gajuk. The analyst downgraded Ardent Health Partners and Universal Health Services to a neutral rating from a buy and revised their respective price targets. Shares fell about 9% and 4%, respectively, during Wednesday’s session. “Republican President and control of Senate … increases the risk of the expiration of the enhanced subsidies and the risk of a reduction to hospital Medicaid supplemental payments,” Gajuk explained. “While Congress is needed to act on the subsidies, the Republican president increases the likelihood of a negative outcome. ” A Trump presidency also creates “uncertainty” surrounding the Affordable Care Act. That could bode poorly for beneficiaries such as HCA Holdings and Centene and put subsidies at a higher chance of expiration, according to Barclays analyst Andrew Mok. “If subsidies expire, we estimate a loss of 3.2 [million] members, or a 15% decline from current ACA membership of 21.4 [million],” he said.
