2 UK stocks that could rise if Trump wins the presidency

Election day has finally arrived in the US, and the results remain on a knife’s edge. The results of the Trump-Harris presidential election runoff could have significant short- and long-term implications, including for UK equities and equities around the world.

Here are two FTS 100 stocks that could rise in value if Donald Trump returns to the White House.

BAE Systems

Defense companies such as BAE Systems (LSE: BA.) have risen in value since Russia’s invasion of Ukraine in 2022. Demand for weapons increased as Western countries added to their arsenals after the end of the Cold War. Many believe this trend will continue as geopolitical tensions increase.

Defense sales could get a boost if Trump is successful today. Improving the military situation is one of his stated priorities, including the creation of the Iron Dome missile defense system and large-scale modernization.

This could be a windfall for BAE Systems, given its status as a leading supplier in the US. Last year, the company generated 42% of its revenue from there, making it the company’s largest market.

But that’s not all. A Trump presidency could also have major implications for other countries’ defense spending.

Criticism of NATO countries for failing to meet spending commitments was a hallmark of his last tenure as president. Rumor has it that if he wins today, he will demand the defense bloc increase arms spending to 3% of gross domestic product (GDP), up from 2% currently.

Defense businesses such as BAE continue to face threats such as supply chain issues and cost inflation. But overall I think the FTSE looks to be in great shape.

Shell

If his last tenure in the White House is anything to go by, the oil industry could also benefit greatly from Trump’s election victory. Investing in Shell (LSE:SHEL) could be a good game on this topic.

Between 2016 and 2020, the former president introduced a wide range of policies that incentivized fossil fuel producers. He increased the number of drilling leases on federal lands, approved pipeline projects such as Keystone XL and rolled back environmental regulations to help businesses cut costs.

Trump’s support for the oil sector has also not wavered over the years. During the campaign, he promised to increase production as part of his “America First” policy.

Shell could be one of the biggest winners if Trump wins today. It is one of the world’s largest oil and gas producers, operating in 70 countries. And it gets a significant portion of its revenue from the U.S. through its extensive refining operations and upstream assets.

However, regardless of who secures the election, there will still be risks to investing in oil companies. The oil market is facing a major oversupply as China’s economy cools and new capacity comes online. That could keep oil prices on their recent downward path, hitting producers. income.

Moreover, countries are investing heavily in renewable energy to move away from oil and gas, which is a long-term challenge. Although Shell’s own investments in renewable energy could help limit this danger.