Trump's Big Beautiful Bill: Winners and Losers in the Stock Market

President Trump's 870-page tax-and-spending bill, the One Big Beautiful Bill Act (OBBBA), has winners and losers among companies. Winners include those with increased tax credits, deductions, write-offs, less onerous regulations, and government spending boosts, such as defense companies. Losers include those with reduced subsidies, phased-out tax breaks, and major cuts to government programs, potentially impairing sales and earnings.

President Trump's 870-page tax-and-spending bill, the One Big Beautiful Bill Act (OBBBA), has been a topic of significant interest and debate among investors and financial professionals. The bill, which aims to increase defense spending and provide tax incentives for U.S. manufacturing, has both winners and losers among companies.

Defense Industry: A Tailwind for Winners

The OBBBA has been a boon for the defense sector. Increased military spending by $150 billion is expected to push the U.S. defense budget for fiscal year 2026 over $1 trillion, the largest in U.S. history Stock Market Winners and Losers of the 'Big, Beautiful' Bill^[1]. This significant boost in defense spending has led to a surge in the stocks of companies involved in the sector. Michael Arone, chief investment strategist at State Street Investment Management, has noted that "the defense industry is an overwhelming winner" Stock Market Winners and Losers of the 'Big, Beautiful' Bill^[1].

Investors can gain exposure to the defense sector through exchange-traded funds (ETFs) such as the iShares U.S. Aerospace & Defense ETF (ITA), which has seen a 36% increase this year. Individual stocks like Lockheed Martin (LMT) and Northrop Grumman (NOC) are also expected to benefit from the increased spending.

Manufacturing and Reshoring: Tax Incentives for Growth

The OBBBA offers tax incentives to encourage companies to manufacture their products in the U.S. Key provisions include making permanent a 100% bonus depreciation and allowing full expensing of domestic research-and-development expenses. These tax breaks are expected to boost the manufacturing sector, with companies like Deere (DE) and Caterpillar (CAT) likely to benefit Stock Market Winners and Losers of the 'Big, Beautiful' Bill^[1].

Investors can gain broad exposure to the industrials sector through the iShares U.S. Industrials ETF (IYJ), which owns about 200 stocks. Individual companies like Trane Technologies (TT) and Vulcan Materials (VMC) are also expected to see increased demand due to the tax incentives.

Artificial Intelligence: A Boost for Semiconductor Makers

The OBBBA also includes provisions that could accelerate the growth of the artificial intelligence business. The bill boosts the tax credit for semiconductor production to 35% from 25%, providing an incentive for companies to build new plants in the U.S. Stock Market Winners and Losers of the 'Big, Beautiful' Bill^[1]. Companies like Micron Technology (MU) and Taiwan Semiconductor Manufacturing (TSM) are expected to benefit from these changes.

Losers: Impaired Sales and Earnings

While the OBBBA has winners, it also has losers. The bill's phase-out of the tax credit for solar panels and the end of the electric vehicle tax credit are expected to impact the sales of U.S. solar panel makers and electric vehicle manufacturers Stock Market Winners and Losers of the 'Big, Beautiful' Bill^[1]. Additionally, sizable cuts to Medicaid could harm hospitals and health insurers that rely on Medicaid for revenue Stock Market Winners and Losers of the 'Big, Beautiful' Bill^[1].

Conclusion

The OBBBA has a significant impact on the financial sector, with winners and losers across various industries. Investors should closely monitor the bill's progress and consider the potential implications for their portfolios. As the bill continues to be debated in Congress, it is crucial to stay informed about any changes that may affect the financial markets.

References

Stock Market Winners and Losers of the 'Big, Beautiful' Bill^[1] https://www.kiplinger.com/investing/stock-market-winners-and-losers-of-the-big-beautiful-bill
Could Trump fail on tax bill? Why going 'big' doesn't always work out as planned^[2] https://www.usatoday.com/story/news/politics/2025/06/07/trump-tax-bill-gop-musk-senate-house/84052280007/