By Ankika Biswas and Pranav Kashyap

(Reuters) – As Americans head to the polls to elect a new president, investors are trying to gauge how stock markets will react amid a tight race between Vice President Kamala Harris and former President Donald Trump.

Harris' lead over Trump has dwindled to a single percentage point, according to a Reuters/Ipsos poll. A majority of analysts foresee a Trump victory boosting equity markets, with some favoring a split government.

Crypto stocks and small-cap stocks have gained in anticipation of the election. Trump's promise to cut corporate taxes and decrease regulations may uplift markets short-term if he wins. However, he also aims to double down on trade tariffs, particularly against China, and reverse spending on clean energy initiatives under the Biden-Harris administration.

Analysts suggest a divided Congress may limit presidential power, potentially stabilizing markets. Here’s a list of stocks and sectors that may react to the election outcome:

TRUMP TRADE

BANKS: A Trump win could bolster Wall Street banks like JPMorgan Chase, Bank of America, and Wells Fargo due to improved investments and regulations. However, concerns exist regarding trade deficits and tariffs potentially hurting the sector.

M&A BENEFICIARIES: Firms such as Goldman Sachs and Morgan Stanley could thrive under a more lenient anti-trust regime.

CRYPTO: A Trump victory may result in a more favorable digital assets regulatory approach. October saw stocks like MicroStrategy and Riot Platforms surging between 3.4% and 45%.

ENERGY: Trump may seek to lighten regulations on domestic oil and gas production, positively impacting companies like Chevron and Exxon Mobil. However, Chinese tariffs might impact LNG exporters.

TRUMP-RELATED STOCKS: Companies like Trump Media & Technology Group and Phunware could benefit from a Trump win, with significant gains noted recently.

PRISON OPERATORS: Geo Group and CoreCivic may see increased demand from promised immigration crackdowns.

CARRIERS: Proposed Chinese tariffs could hurt carriers like FedEx and UPS.

SMALL-CAP STOCKS: US-focused companies might benefit from business incentives, leading to a nearly 9% rise in the Russell 2000 index.

HARRIS BASKET

HOMEBUILDERS: Harris' home construction pledges could elevate companies like D.R. Horton and Lennar in a low-interest environment.

HEALTHCARE: Harris plans to cap healthcare costs, which might negatively impact pharmaceutical firms but could benefit healthcare insurers like UnitedHealth Group.

CORPORATE TAXES: Harris' proposed 28% corporate tax rate could impact large firms like Microsoft and Apple.'

RENEWABLE STOCKS: Green energy sectors could thrive under Harris' administration, with a focus on pollution reduction in alignment with the Paris Agreement. Companies like NextEra Energy may benefit from increased incentives.