8 ways President Donald Trump will affect Wall Street

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Wall Street reacts to President-elect Trump.

Well, that was quick. Wall Street’s midnight anxiety about Donald Trump’s victory appears to have been for nothing. The market snapped back quickly Wednesday morning, just hours after all the major indices tumbled badly overnight. But now the campaign is over, and the more difficult job of governing is set to begin. Here are some of the major issues from President Donald Trump that Wall Street will be watching in the weeks and months to come.

How will Trump and Congress get along?

Republicans have control of the White House, the Senate and the House, but that doesn’t mean Trump will have an easy time on Capitol Hill. The GOP was badly fractured throughout the primary and general election season, as Trump insulted his way through 17 Republican opponents. Several big names in the party, including former Florida Gov. Jeb Bush, Ohio Gov. John Kasich, Arizona Sen. John McCain and 2012 nominee Mitt Romney refused to support Trump, and House Speaker Paul Ryan would not campaign with him. Trump will have to build support with his former opponents to push his populist agenda into law.

See how newspapers around the globe reacted to Trump’s victory:

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Health care will be a growth sector.

The health care sector is perhaps the single biggest beneficiary of a Trump presidency, though not necessarily because of anything Trump himself will do for it. It’s more the fact that Hillary Clinton won’t be calling the shots that has investors feeling bullish. Clinton had called out the health care sector specifically for its price-gouging on life-saving drugs, and outlined plans she would take to prevent price-gouging. The Health Care SPDR ETF (ticker: XLV), which tracks health care stocks in the Standard Poor’s 500 index, rose about 3 percent on Wednesday after Trump’s victory. Gilead Sciences (GILD) and Regeneron Pharmaceuticals (REGN) were two standout performers in the sector.

The financial sector flexes its muscle.

Given the perception of Clinton as a friend of Wall Street, one might expect bank stocks to plunge after Trump’s victory. However, financials and health care were the two top-performing sectors in the immediate wake of Trump’s surprise win. The fact that Trump himself is a billionaire New York businessman who’s worked closely with large banks his entire career in the private sector may have something to do with that. In fact, it’s likely Trump will take a more hands-off approach to Wall Street regulation, as he’s spoken before about repealing Dodd-Frank, the most significant piece of financial legislation this century.

Oil and mining companies are hot – for now.

Trump campaigned on a promise to support American jobs, particularly in the domestic oil and coal industry. So while major foreign oil providers such as BP (BP) and Royal Dutch Shell (RDS.A) were essentially flat on Wednesday, smaller companies such as Valero Energy Corp. (VLO), Kinder Morgan (KMI), Williams Companies (WMB) and Newmont Mining Corp. (NEM) were all beating the market. Look for domestic energy companies to do well in the Trump administration – if he is able to uphold his campaign promises.

Interest rates may hold fast, again.

The Federal Reserve, once widely believed to be gearing up for an interest rate hike at its December meeting, will likely rethink that decision after Trump’s surprise victory. Although the U.S. stock market erased all of the early losses it racked up when it first became apparent Trump was going to win, a Trump presidency still brings huge uncertainty along with it. The Fed will want to have some idea of how the Trump administration will handle things like international trade, geopolitical issues, the U.S. energy industry and the national debt before blindly raising rates because it feels overdue.

Gold is a better option now.

Gold faces modestly better prospects under a President Trump than a President Clinton, at least in the short term. The precious metal is often seen as a hedge against uncertainty, and there’s plenty of that to go around with a first-time politician coming to the White House. Another tailwind for gold is the Federal Reserve’s increased likelihood of keeping rates lower for longer – rising rates tend to pressure the price of gold, as gold reserves don’t pay any sort of dividend. The SPDR Gold Trust (GLD) and VanEck Vectors Gold Miners ETF (GDX) each advanced after Trump’s win, with GDX soaring 5 percent.

Gun stocks are vulnerable.

Wall Street is rebounding, but you wouldn’t know that looking at the major gun stocks. Sturm Ruger Co. (RGR) was down 12.6 percent Wednesday, while Smith Wesson Holding Corp. (SWHC) was down 11.4 percent. The reason? Trump had long vilified Clinton as wanting to dismantle the Second Amendment, and nothing boosts gun stocks more than a perceived threat to the industry. But with Trump moving into the White House, there’s no fear that handguns will become collectors’ items, so the stock won’t be as appealing.

Weakness in foreign markets.

Making America Great Again doesn’t necessarily translate to international markets – and America’s willingness to embrace Trump’s repudiation of President Barack Obama’s free trade policies continues to send ripples through international markets. Indices in Brazil, Argentina, Australia, China, Hong Kong, India, Japan and Taiwan were all down Wednesday. If Wall Street continues to shrug off naysayers who predicted that Trump’s presidency would trigger a recession, foreign markets will begin to bounce back. But global neighbors have every reason to be concerned by Trump’s rhetoric, and overseas markets will be a touchy place to invest in the near term.

See more pics from Trump’s win on Tuesday:

U.S. President-elect Donald Trump speaks at his election night rally in Manhattan, New York, U.S., November 9, 2016.

(REUTERS/Carlo Allegri)

Donald Trump supporters cheer as U.S. presidential election results are announced during a Republican watch party in Phoenix, Arizona, November 8, 2016.

(REUTERS/Nancy Wiechec)

Republican president-elect Donald Trump delivers his acceptance speech during his election night event at the New York Hilton Midtown in the early morning hours of November 9, 2016 in New York City. Donald Trump defeated Democratic presidential nominee Hillary Clinton to become the 45th president of the United States.

(Photo by Chip Somodevilla/Getty Images)

President-elect Donald Trump, shakes hands with Vice-President-elect Mike Pence during his election night rally, Wednesday, Nov. 9, 2016, in New York.

(AP Photo/John Locher)

U.S. President-elect Donald Trump and his campaign manager Kellyanne Conway greet supporters during his election night rally in Manhattan, New York, U.S., November 9, 2016.

(REUTERS/Mike Segar/TPX IMAGES OF THE DAY)

Supporters of Republican presidential candidate Donald Trump cheer as they watch election returns during an election night rally, Tuesday, Nov. 8, 2016, in New York.

(AP Photo/ Evan Vucci)

Eric Trump and Donald Trump Jr. look on as Republican presidential elect Donald Trump speaks during election night at the New York Hilton Midtown in New York on November 9, 2016.

(JIM WATSON/AFP/Getty Images)

US President-elect Donald Trump arrives at the New York Hilton Midtown in New York on November 8, 2016. Trump stunned America and the world Wednesday, riding a wave of populist resentment to defeat Hillary Clinton in the race to become the 45th president of the United States.

(SAUL LOEB/AFP/Getty Images)

Republican U.S. presidential nominee Donald Trump greets supporters at his election night rally in Manhattan, New York, U.S., November 9, 2016.

(REUTERS/Carlo Allegri)

Vice president-elect Mike Pence speaks to supporters at Republican president-elect Donald Trump’s election night event at the New York Hilton Midtown in the early morning hours of November 9, 2016 in New York City. Donald Trump defeated Democratic presidential nominee Hillary Clinton to become the 45th president of the United States.

(Photo by Joe Raedle/Getty Images)

Republican president-elect Donald Trump walks on stage with his son Barron Trump, wife Melania Trump and Ivanka Trump during his election night event at the New York Hilton Midtown in the early morning hours of November 9, 2016 in New York City. Donald Trump defeated Democratic presidential nominee Hillary Clinton to become the 45th president of the United States.

(Photo by Chip Somodevilla/Getty Images)

A supporter celebrates as returns come in for Republican U.S. presidential nominee Donald Trump during an election night rally in Manhattan, New York, U.S., November 8, 2016.

(REUTERS/Mike Segar)

Chairman of the Republican National Committee (RNC) Reince Priebus hugs Republican presidential elect Donald Trump during election night at the New York Hilton Midtown in New York on November 9, 2016.

(JIM WATSON/AFP/Getty Images)

Former New York City Mayor Rudolph Giuliani arrives on stage with his wife Judith Nathan as U.S. President-elect Donald Trump addressed supporters at his election night rally in Manhattan, New York, U.S., November 9, 2016.

(REUTERS/Brendan McDermid)

US President-elect Donald Trump greets son Eric after speaking at the New York Hilton Midtown in New York on November 8, 2016. Trump stunned America and the world Wednesday, riding a wave of populist resentment to defeat Hillary Clinton in the race to become the 45th president of the United States.

(SAUL LOEB/AFP/Getty Images)

Vice president-elect Mike Pence walks on stage with his wife Karen Pence at Republican president-elect Donald Trump election night event at the New York Hilton Midtown in the early morning hours of November 9, 2016 in New York City. Americans went to the polls yesterday to choose between Republican presidential nominee Donald Trump and Democratic presidential nominee Hillary Clinton as they go to the polls to vote for the next president of the United States.

(Photo by Joe Raedle/Getty Images)

US President-elect Donald Trump arrives with his son Baron and wife Melania at the New York Hilton Midtown in New York on November 8, 2016. Trump stunned America and the world Wednesday, riding a wave of populist resentment to defeat Hillary Clinton in the race to become the 45th president of the United States.

(SAUL LOEB/AFP/Getty Images)

U.S. President-elect Donald Trump, speaks an election night party at the Hilton Midtown hotel in New York, U.S., on Wednesday, Nov. 9, 2016. Trump was elected the 45th president of the United States in a repudiation of the political establishment that jolted financial markets and likely will reorder the nation’s priorities and fundamentally alter America’s relationship with the world.

(Photographer: Andrew Harrer/Bloomberg via Getty Images)

Melania Trump and Ivanka Trump look on as Republican presidential elect Donald Trump speaks during election night at the New York Hilton Midtown in New York on November 9, 2016.

(JIM WATSON/AFP/Getty Images)

U.S. President-elect Donald Trump arrives to speak during an election night party at the Hilton Midtown hotel in New York, U.S., on Wednesday, Nov. 9, 2016. Trump racked up victory after victory in key states Tuesday to put himself in position to threaten Hillary Clinton for the White House, with the results in three Rust-Belt states likely to determine the next U.S. president.

(Photographer: Andrew Harrer/Bloomberg via Getty Images)

Republican president-elect Donald Trump delivers his acceptance speech during his election night event at the New York Hilton Midtown in the early morning hours of November 9, 2016 in New York City. Donald Trump defeated Democratic presidential nominee Hillary Clinton to become the 45th president of the United States.

(Photo by Chip Somodevilla/Getty Images)

President-elect Donald Trump gives his acceptance speech during his election night rally, Wednesday, Nov. 9, 2016, in New York.

(AP Photo/John Locher)

Attendees cheer during an election night party for U.S. President-elect Donald Trump at the Hilton Midtown hotel in New York, U.S., on Wednesday, Nov. 9, 2016. Trump was elected the 45th president of the United States in a repudiation of the political establishment that jolted financial markets and likely will reorder the nation’s priorities and fundamentally alter America’s relationship with the world.

(Photographer: Andrew Harrer/Bloomberg via Getty Images)

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