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there are less than two months left until the us election on november 5, and the election results will have different impacts on us stocks. before the final battle, vice president kamala harris and former president donald trump will start a "debate showdown" on tuesday evening (10th) eastern time, and investors can get a glimpse of the clues from it.

for wall street, the showdown could add another layer of volatility at a time when uncertainty over the job market, interest rates and geopolitics has investors nervous. the s&p 500 just had its worst week since march 2023, and another disappointing u.s. jobs report revived concerns that the economy is cooling.

looking at policy insights on taxes, trade, tariffs and immigration, here are the issues investors will be watching in the debate:

tax:trump has said he would cut the corporate tax rate to 15% from the current 21% and has vowed to make the 2017 tax overhaul permanent, pushing for updates to key parts of the law. harris, meanwhile, is pushing to raise the corporate tax rate to 28%. she proposes keeping the rate unchanged for those earning less than $400,000 while raising taxes on higher incomes.

trade and tariffs:trump talked about imposing a 10% tariff across the board. harris commented that this would be equivalent to "imposing a national sales tax" on daily necessities and daily necessities imported from other countries, which means that the daily life burden of americans will increase.

immigration issues:trump has said he would simply deport undocumented immigrants. harris has expressed support for an immigration deal that includes building additional border walls. meanwhile, democrats have closed the u.s.-mexico border and rejected some asylum applications. jpmorgan strategists said any effective restrictions on immigration could be a potential driver of inflation if they create a severe labor shortage, thereby curbing economic growth.

the stock market in an election year

election years are usually good for the u.s. stock market. the s&p 500 has risen in almost every election year since 1960. the only exceptions were 2000 and 2008, which were affected by the bursting of the internet bubble and the financial crisis, respectively.

that record looks even better in recent election cycles. in each of the three election years since 2008 — 2012, 2016, and 2020 — the s&p 500 has risen by at least 10%.

a narrower view, focusing on just the last seven months of an election year, yields similar results. according to data and analysis from the stock trader’s almanac, the s&p 500 has risen during that time in 16 of the 18 presidential elections since 1950. the only exceptions were 2000 and 2008.

how does the election structure affect the us stock market?

harris wins

harris' victory is expected to benefit a range of industries, including renewable energy companies, electric vehicle makers and even utilities.

specifically, the democratic party's positive stance on clean energy means that harris' victory is good news for electric vehicle manufacturers including tesla, rivian and lucid, electric vehicle charging network operators such as chargepoint holdings inc., beam global, blink charging co., as well as suppliers and battery manufacturers.

solar stocks, which include first solar inc., sunrun inc. and enphase energy inc., are also expected to perform better under harris because the democrat supports renewable energy.

home builders could also get a boost. harris has proposed providing up to $25,000 in down payment support for first-time homebuyers and tax incentives for builders who build first-time homes. she also called for a $40 billion innovation fund to spur innovation in housing construction. stocks such as dr horton inc., lennar corp. and kb home could benefit.

the financial sector may not fare any better, as a harris administration is expected to continue tight regulation, imposing higher capital requirements on banks such as bank of america corp., jpmorgan chase & co. and goldman sachs group inc., and credit card fee revenues will continue to come under pressure. drugmakers could also face regulatory pressure, as harris has proposed capping out-of-pocket spending on prescription drugs at $2,000 a year.

trump wins

companies with high revenue exposure to china could face disruptions if trade tensions escalate. some notable names include chipmakers such as nvidia corp., broadcom inc. and qualcomm inc., materials companies such as air products and chemicals inc. and celanese corp., auto companies such as tesla inc. and borgwarner inc., and industrial companies such as otis elevator corp.

oil, gas and traditional energy companies are seen as possible beneficiaries of a trump victory, as he has vowed to lift restrictions on domestic oil production. stocks to watch include baker hughes, exxonmobil, conocophillips, occidental petroleum, williams companies, halliburton, devon energy, chevron, and others.

clean energy and electric vehicle companies that benefited from biden's inflation reduction act are expected to face challenges under trump, as he has said he will completely overturn biden's electric vehicle policies. if trump cancels the tax credit for buyers, companies at risk include tesla, rivian and lucid, as well as battery manufacturers and parts suppliers.

defense stocks are expected to perform better in the event of a republican victory, as defense spending is expected to be a clear priority for the republican party. stocks to watch include lockheed martin corp., a u.s. aerospace manufacturer, northrop grumman corp., a u.s. multinational aerospace and defense technology company, and rtx corporation.

likewise, prison stocks such as geo group inc. and corecivic inc. could also rise, as strict immigration policies would benefit operators of prison facilities. gun makers such as smith & wesson brands inc. and sturm ruger & co. inc. also tend to rise on republican wins.

cryptocurrency stocks have recently been seen as representative of the "trump trade" as the former president has made an about-face on bitcoin and other digital assets since his campaign, even promising to make the u.s. the "crypto capital" of the world. stocks to watch include coinbase global inc., marathon digital holdings inc., riot platforms inc., cleanspark inc., microstrategy inc. and cipher mining inc., as well as the bitwise crypto industry innovators etf.