Trump’s State of the Union: Which Stocks Could Soar — and Which Could Sink — After the Speech?

President Trump will deliver his State of the Union address Tuesday night at a moment of unusual political and economic tension. With approval ratings under pressure, midterm elections looming, and the Supreme Court having just curtailed his use of emergency tariff powers, the speech carries more political weight than typical annual addresses. For investors, however, the key question is simpler: which industries stand to benefit from the policy themes likely to dominate the evening?

The clear centerpiece is expected to be the economy. Polling shows voter dissatisfaction with inflation, housing costs, groceries, and utilities remains elevated. Trump is likely to frame his first thirteen months of his second term as a transition period inherited from prior policy decisions, while emphasizing tax cuts, reshoring manufacturing, and energy expansion as core solutions.

From a market perspective , the industries most likely to see rhetorical tailwinds include energy, domestic manufacturing, defense, housing, and certain industrial sectors.

Energy is likely to feature prominently. Vice President JD Vance has previewed that Trump will speak about lowering energy costs, and the administration has consistently linked domestic drilling and production to affordability. Oil & gas producers, LNG exporters, pipeline operators, and refining companies could see renewed emphasis. If Trump doubles down on permitting reform or expanded drilling access, the sector may view it as supportive, particularly as energy costs filter into broader inflation narratives.

Manufacturing and reshoring will also be front and center. Expect language around “bringing jobs back” and building new factories domestically. Companies tied to industrial automation, heavy machinery, steel, construction materials, and semiconductor manufacturing could be positioned as beneficiaries. Defense contractors may also gain attention given the administration’s assertive posture toward Iran and continued geopolitical tensions.

Housing affordability is likely to be a major talking point. Trump has repeatedly referenced lowering mortgage rates and boosting supply. While the White House does not directly control interest rates, investors will watch for proposals involving tax incentives for homebuilders, regulatory reform, zoning flexibility, or targeted housing credits. Homebuilders, building materials firms, mortgage lenders, and home improvement retailers could all react to any perceived policy support. The affordability narrative also ties into potential relief measures for first-time buyers or expanded credit access.

Healthcare may also enter the discussion, particularly around prescription drug pricing. Trump has referenced efforts to create government-backed purchasing platforms or websites to lower drug costs. Managed care companies, PBMs, and pharmaceutical firms could move depending on the tone. If rhetoric targets drug pricing aggressively, it could pressure certain large-cap pharma names, while healthcare distributors or generics manufacturers might benefit.

Trade policy remains the wild card. The Supreme Court’s ruling striking down much of the administration’s use of the International Emergency Economic Powers Act has reshaped the tariff landscape. Trump has already responded with a 15% global tariff under Section 122 authority, which is temporary and capped at 150 days without congressional extension. Investors will be watching for clarity on how aggressively the administration intends to pursue Section 301 or Section 232 investigations to replace those tariffs.

Industries sensitive to imported materials—retail, autos, consumer electronics, and building supplies—will be particularly attuned to any escalation. Domestic steel, aluminum, and select industrial manufacturers could benefit if protectionist measures expand. However, tariff uncertainty has historically weighed on equity multiples, particularly in consumer discretionary and multinational sectors.

Affordability remains the political pressure point. Inflation data has moderated from its peak but remains sticky in key household categories. The administration may highlight tax relief under the One Big Beautiful Bill Act, while signaling regulatory efforts aimed at consumer credit, energy costs, and supply chains. However, analysts note that major new fiscal packages appear unlikely this year, limiting the scope of near-term stimulus.

Foreign policy will also be closely watched. The administration’s posture toward Iran has intensified, and military positioning in the Middle East has increased. Defense contractors and aerospace firms could respond positively if the speech signals sustained defense spending or geopolitical firmness. However, markets generally prefer stability, and any escalation rhetoric could create short-term volatility, particularly in energy prices.

Politically, this promises to be a contentious evening. Democrats are expected to challenge the administration’s claims on affordability and tariffs, and the reaction in the chamber could draw as much attention as the speech itself. Historically, dramatic moments—whether protests, applause lines, or partisan exchanges—often dominate headlines more than policy specifics.

For investors, it is worth remembering that State of the Union speeches rarely have lasting effects on stock markets. While sectors mentioned favorably may see short-term moves, these reactions often fade quickly. In many cases, markets exhibit a “sell the news” pattern, particularly if expectations were already elevated heading into the event. Unless accompanied by concrete legislative proposals or executive actions, rhetoric alone seldom alters long-term earnings trajectories.

In short, Tuesday’s address is likely to focus heavily on the economy, reshoring, energy, housing affordability, and a continued commitment to tariffs in modified form. Defense and energy could see supportive language, housing and manufacturing may be framed as central to economic renewal, and healthcare affordability may resurface as a talking point.

But investors should temper expectations. Presidential speeches can shape narratives, but fundamentals—earnings growth, inflation data, interest rates, and global stability—ultimately drive markets. Tuesday night may generate headlines and short-term sector rotations, but the long-term trajectory of equities will depend far more on policy execution than on the words delivered from the House chamber.