The ASX shares that could sink if Trump wins the US election

The data shows one sector heavily affected.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With the 2024 US Presidential Election on the horizon, investors are keenly assessing how a Trump victory could impact ASX shares.

One fund manager says that Australian gold companies could be in for a rough ride if Donald Trump returns to the White House.

This includes companies like De Grey Mining Ltd (ASX: DEG), Mineral Resources Ltd (ASX: MIN), and St Barbara Ltd (ASX: SBM).

As the election approaches next month, here's what Plato Investment Management says Australian investors need to know.

A US flag behind a graph, indicating investment in US shares.

Image source: Getty Images

How would a Trump win impact ASX shares?

If the betting markets are any indication, Plato Investment Management says a Trump comeback could bring significant volatility to ASX shares, particularly in the mining sector.

Portfolio manager Dr David Allen says that history has shown gold tends to thrive during periods of political and fiscal uncertainty.

But the reaction to a Trump victory could be different this time around.

Using data obtained from prediction markets, Allen and the team at Plato have created a list of stocks to avoid in the event of a Trump re-election.

And the reasoning isn't anything political at all. Plato constructs the list of ASX shares using raw data analysis:

"These stocks have had the strongest negative price moves during instances when betting markets have recorded a 30% increase in the probability of a Trump presidential win."

Plato's list contains three ASX mining companies that may or may not surprise some investors. The firm's findings are particularly critical of gold companies – interesting, seeing as the yellow metal set another record high yesterday.

Notably, several Australian gold companies are on the list. A Trump presidency, characterised by deregulation and tax cuts, could apply downward pressure on gold, creating a headwind for gold, traditionally a safe-haven asset.

If Trump pursues more aggressive fiscal measures, US interest rates could rise, strengthening the US dollar and putting downward pressure on gold prices.

A stronger dollar could make gold less appealing to international buyers, potentially hurting Australian gold miners.

Moreover, some of these ASX shares are already experiencing a downfall. Mineral Resources shares are down more than 32% in the past year, with losses extending today after revelations on the CEO's personal tax history.

A Trump win could boost some, as well

While some stocks might struggle with a Trump presidency, Plato was prudent in providing a list of companies that could find opportunities.

It used the same criteria but did not come up with any ASX shares. These were all USA beneficiaries, concentrated in the oil & gas, semiconductors, and banking industries.

Many of these stocks tend to rise sharply whenever the market does anyways.

Despite the focus on providing a framework to invest during the election, Plato still incorporates the base fundamentals. That is, thinking long-term, and remaining diversified in risk management.

Rather than spending endless hours trying to anticipate inherently unpredictable events, we feel this is the most prudent approach to ensure your portfolio will not be significantly impacted whoever wins on November 5 – it's about protecting, not predicting

Foolish takeaway

As the US Presidential Election approaches, some ASX shares could be in for a tough ride if Plato Investment Management is correct in its analysis.

The old "this time is different" saying continuously plays amongst investor circles. But if historical data shows anything, it's that history doesn't repeat, but it often rhymes.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Economy

A vortex of ASX shares on the boards gets sucked into an Australian flag, indicating trading on the ASX share market.
Economy

Here's why the ASX 200 is falling despite a sea of green

Big miners and banks are dragging on the ASX 200 today.

Read more »

ASX board.
Economy

Why is the ASX 200 falling when so many stocks are rising?

Big miners and banks are pulling the ASX 200 lower.

Read more »

Woman with a scared look has hands on her face.
Economy

Why is the ASX 200 being smashed today?

The ASX 200 has lost momentum after reaching recent highs.

Read more »

A vortex of ASX shares on the boards gets sucked into an Australian flag, indicating trading on the ASX share market.
Economy

Why the ASX 200 is rallying despite a weaker growth warning

Resources lead the ASX 200 higher today.

Read more »

Pieces of paper with percetage rates on them and a question mark.
Economy

Why the RBA's next move could be the most important event for ASX shares in 2026

The RBA meets on 16 June. Here is why the decision could move CBA, Westpac, and Mirvac shares more than…

Read more »

Close-up photo of a back jean pocket with Australian dollar bills in it and a hand reaching in to collect the notes
Economy

Australia's minimum wage just rose 4.75%. Here is what it means for ASX consumer stocks

Australia's minimum wage rose 4.75% to $26.44 per hour from July 2026. Here's what that means for ASX consumer stocks.

Read more »

A young man talks tech on his phone while looking at a laptop with a financial graph superimposed across the image.
Economy

Why's the ASX 200 falling today despite another tech rally?

The ASX 200 is having a choppy session.

Read more »

Man ecstatic after reading good news.
Economy

Job ads rose for the first time in three months. Here is why that is good news for these ASX shares

Australian job ads rose 1.8% in May for the first time in three months.

Read more »