This is an audio transcript of the Behind the Money podcast episode: ‘Wall Street, tech and energy during Trump’s second term’
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Michela Tindera
Last week, American voters picked Donald Trump to be the country’s next president. After four years under President Joe Biden, this signals that there’s likely going to be a lot of changes ahead come January 2025. It’s still early days and there are a lot of unknowns. But to get a better picture around how things might shake out, I wanted to speak with some of my FT colleagues to try and understand how a second Trump administration will impact a few key sectors in corporate America.
So today on the show, we’re gonna go through each of those — starting with Wall Street, then the tech sector, and then energy. We’re gonna talk about how these industries are adjusting to the next Trump administration: who is set to succeed and struggle over the following four years. So let’s get down to it. I’m Michela Tindera from the Financial Times. And this is Behind the Money.
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To kick it off. I want to talk about Wall Street. So to do that, I’m joined here in New York by the FT’s US financial editor, Brooke Masters. Hi Brooke, welcome!
Brooke Masters
Hi.
Michela Tindera
OK. So we will get to what to expect under a second Trump administration. But first, let’s review a bit. The last four years on Wall Street, you know, markets have certainly been doing pretty well.
Brooke Masters
I mean, markets have been relatively strong, so it’s been OK. But the Biden administration in two ways has made Wall Street feel very constrained. First, you know, they’ve had a very tough attitude towards deals because of their competition regulations. So that just meant there were less deals and lots of deals didn’t go through. So everybody on Wall Street who makes their money off buying and selling companies to each other hates that.
The other thing that happened was at the banking and securities regulators, there was a definite clampdown. The banks — particularly after the 2023 regional banking crisis — were under much tougher scrutiny, and there were proposals to radically increase the amount of capital they had to hold, particularly for the largest banks.
Michela Tindera
Basel III Endgame
Brooke Masters
Yeah, the Basel III Endgame which the banks have spent a year and a ton of money fighting. And then the other thing that happened is the Securities and Exchange Commission was led by Gary Gensler and went on an absolute regulatory blitz. You know, pumping out new rules all the time. Many of them, the industry probably could have lived with, but all piled together just created this sense of absolute fury. And so they started suing to stop him. You know, relations with the industry were bitter and angry.
Michela Tindera
So overall, the Biden administration has been seen as a significant drag on the industry. So what was the immediate reaction to Trump’s win last week?
Brooke Masters
As an industry, everybody was giddy. I mean, bank stocks shot up 10 per cent. There’s a general sense that dealmaking is back, that life will be easier for banks. Private equity is excited. I mean, it’s definitely, you know, party time on Wall Street right now.
Michela Tindera
So then what are your sources telling you will be the biggest changes that Wall Street can expect under a Trump 2.0 presidency?
Brooke Masters
Well, I think the first big change is the Basel Endgame effort to put more capital requirements is dead. The banks are deciding whether to make a big fight to try and convince the Trump administration to actually loosen things. So that’s a big question whether that will happen. On the SEC side, Gary Gensler is gonna be gone. Whoever is heading the SEC, their general instinct will be less regulation. And when they do do regulations to work more closely with the industry, the industry folks I talked to aren’t expecting a huge deregulation, taking away all the things Gensler did. But even if they can stop what they see as an unwarranted piling up, that’s a big improvement for them.
Michela Tindera
Now, on Trump’s economic policies, two things that he campaigned on are tax cuts and then also some pretty aggressive tariffs. How will those measures impact Wall Street?
Brooke Masters
Well, obviously, lower taxes means people have more savings, which they have more money to invest in the markets, which is just great for money managers and in general means companies have more money to invest. They can do more deals. It’s all good for Wall Street.
Tariffs are more complicated. And actually, tariffs are potentially inflationary because they put prices up. High inflation is not so good for Wall Street because that means interest rates get higher. So I think there is some concern that if it’s overdone and the tariffs are done badly, that could lead particularly to some sort of economic downturn or to runaway inflation. That’s bad. So they are hoping, I think, that the Trump administration doesn’t go overboard with some of the more radical ideas.
Michela Tindera
So, as you say, the tariffs are definitely a long-term risk for the economy and the impact that they could have on markets. But what other risks should we be thinking about?
Brooke Masters
Well, I think one thing is this question of how much power Elon Musk is gonna have and whether there really is gonna be kind of a bonfire of the federal government where they’re gonna fire bunches of people and try to really push their luck. I mean, they said they’re going to. It is never clear how much Trump means and how much of it is rhetoric. That would be a big change.
Michela Tindera
Right. Elon Musk contributed more than $100mn to a pro-Trump Super Pac during the campaign. There’s been talk of a role for him in the administration. What do you think could happen if he is allowed to fire a bunch of people in the government?
Brooke Masters
So if you drive people out of the government, you end up having non-experts and not very competent people working in your regulators. It’s very easy to miss risk. It’s also possible to deregulate too much. One example people have brought up to me recently is, you know, in 2019, the Trump administration reduced some of the oversight in capital requirements for large-ish, but not huge banks. They said, you know what, actually, we’ve been too mean to those banks, we’ll reduce some of their requirements.
Some of those banks then failed in 2023 and caused the regional banking crisis. And there’s a pretty direct line there. So, you know, poorly thought out regulation, particularly when coupled with a descaling of the regulatory agencies who are watching for trouble, can be a disaster.
Michela Tindera
What about an area like crypto? You know, certainly now that Elon Musk is tied very closely to Trump, what’s the outlook for the crypto space?
Brooke Masters
It’s possible if Republicans control both houses of Congress that they’ll be able to put together an actual plan to regulate crypto, because the problem with crypto is it doesn’t neatly fit into the existing regulatory structure. The SEC has been using its enforcement power to go after people. And with a more crypto-friendly administration, there may be less enforcement. But there might also actually just be a law that says this is how we’re gonna regulate crypto. Which I think the crypto industry would in some ways very much like, because they’d like some rules of the road. It’s not like there will be no enforcement. It’s just that it’s certainly opening the door to having more crypto, you know, available to ordinary retail investors in a form that’s relatively palatable to them.
Michela Tindera
So changing gears a bit here. Under a new Trump presidency, who do you expect to be the biggest winner on Wall Street?
Brooke Masters
Private equity, I think, because — as long as interest rates don’t get too high — because they’ll be able to do lots of deals and roll things up and not have to worry about antitrust scrutiny.
Michela Tindera
Yeah. And under a Trump presidency, who would you expect on Wall Street to be the biggest loser?
Brooke Masters
Biggest loser from Trump? Well, I think if there’s a backlash and something goes wrong, then the whole industry gets in trouble. But otherwise, I suppose the other group that could be at risk is, you know, if you are a well-behaved bank that has invested heavily in compliance and gotten ready to comply with all these rules, and you now have competitors who don’t have to, you may be struggling. So some of the sort of staid, boring banks that have just tried to be good could face new challenges from other players.
Michela Tindera
Brooke, thanks for being here.
Brooke Masters
Thanks for having me.
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Michela Tindera
Next up, let’s jump over to California, where I want to welcome the San Francisco bureau chief, Stephen Morris. Stephen leads reporting coverage of the world’s biggest tech companies: Nvidia, OpenAI, Microsoft. Hey, Stephen. How are you?
Stephen Morris
Yeah, I’m good, thank you. It’s been a busy few days.
Michela Tindera
Yeah, I’m sure. So starting off, broad strokes here, describe for me how things have been going for big tech over the last four years under the Biden administration.
Stephen Morris
From a share price and performance standpoint, it’s been an extraordinary period of success for some of America’s biggest tech companies: Google, Microsoft, Nvidia, Meta, Tesla. I have seen, you know, their market valuations skyrocket. Times have been good. But it’s been evident for a while that these tech companies have formed monopolies and then acted pretty aggressively to ensure that they stay atop of the food chain, in search, in app stores, in ecommerce, in chip making. So the flip side of the Biden years has been that the Democrats have pursued a more activist antitrust agenda and a more activist regulatory investigation agenda.
So you have these companies that record stock prices arguably at the apex of their power, but still at the same time facing existential threats from antitrust officials. So it’s really, you know, the situation is both incredibly powerful and incredibly precarious. But the election of Trump, I would say, kind of definitively changes this.
Michela Tindera
Right. So what kinds of opportunities do you think Silicon Valley is seeing for themselves, you know, entering a new Trump administration?
Stephen Morris
I think the big area for them is policy. Policy towards regulation, policy towards antitrust, policy towards M&A and dealmaking.
Michela Tindera
Right. On those things, I mean, there’s an expectation that dealmaking is gonna increase and the antitrust and regulatory burdens will be light in some. So what does all that mean for tech?
Stephen Morris
If more deals are allowed in the tech sector, we’ll see the big players start to get even bigger. We’ll also see venture capitalists and private equity firms licking their lips at the prospect of selling some of their portfolio companies to the aforementioned big tech ones or to each other. Since the explosion of dealmaking in 2021, it’s really been a quiet time.
Because remember, it’s not just deals being blocked, it’s the fear of deals being blocked. You know, these things are very expensive. They take a long time to put together with lawyers and advisers. And you’re not gonna embark on that if you think the FTC, DOJ or somebody else is just gonna put the kibosh on it after you’ve worked on it for six months. But now the threat of that has been substantially lifted. So I’m told by lawyers out there that, you know, the conversations are already starting in boardrooms.
Michela Tindera
Yeah. With regulation, Trump’s promise to cancel Biden’s executive order on artificial intelligence, which, you know, some of the things that were part of that were requiring developers of AI systems to share some information with the US government. What does that sort of mean for the future of the AI industry?
Stephen Morris
Yes, I mean, obviously the very top-end generative AI systems have the potential to be incredibly powerful and certain people, including Elon Musk, think incredibly dangerous in terms of the future of humanity. So there are arguments going on about how this technology should be regulated and whether any laws should come in.
Now, obviously, it moves so quickly, it’s very hard to do this and there are very few people in Washington or elsewhere who actually understand how this technology works and how best to control it. So I think that’s one of the top things on the agenda. But how this all shakes out in the incredibly fast-moving world of AI remains to be seen. But I think it’s gonna be much more interesting from both a competitive perspective within the US, but also globally.
Michela Tindera
But what about something like Trump’s plans to implement tariffs? I mean, won’t that have a negative impact on a lot of hardware manufacturers?
Stephen Morris
Well, the tech sector will be very interested in tariffs in a number of areas. It’s not just electric vehicles. It’s every part of the tech supply chain from Apple and its ubiquitous iPhones to Nvidia and the way that it makes GPUs. Trump caused a lot of issues on this and was very unpredictable in his first term. So everyone will be keeping an extremely close eye on how Trump approaches trade tariffs, trade wars with China in his second term. And that could have severe impacts on some of these big tech companies and how they build their hardware. So tariffs will be an area of big importance.
Michela Tindera
So we mentioned earlier Elon Musk and his role in the Trump administration. And you’ve been reporting on him quite a bit. Can you tell me more? Just what is Musk hoping to do with this newfound relationship with Trump?
Stephen Morris
Well, Musk has made an extraordinary and unprecedented intervention into the election. It’s very clear that Musk, at least at the moment, has no plans to leave politics. He’s, you know, had this floated role of the . . . yeah, as head of the Department of Government Efficiency. He’s spoken pretty freely about wanting to slash $2tn from the US budget, firing thousands of people from the vast federal bureaucracy and eliminating a wide range of regulations which he blames for stifling American innovation and putting them at a disadvantage against their enemies, such as Russia and China.
But let’s not overlook the very concrete self-interest and business interest here. Musk runs Tesla, world’s largest electric vehicle maker. He runs SpaceX, which pretty much runs the US space program at this point. Starlink, which is growing into a legitimate challenger to wired broadband around the world. And then, of course, X, the social media platform. All of these companies face significant regulatory probes, legal challenges and obstacles to growing and becoming more profitable and powerful. Having the ear of the president is an excellent position for Musk to be in to unblock some of those challenges and become even more powerful and wealthy himself.
Michela Tindera
And what would you say that all means for Silicon Valley more broadly?
Stephen Morris
So it looks like after really decades of Silicon Valley and the tech sector almost kind of trying to ignore DC and the political scene, we’re gonna see a much, much more active period from them, spearheaded by Musk, who for as long as he and Donald Trump remain in sync and each other’s friends will likely play a very influential role in the direction of the government and how it approaches things like regulation and dealmaking.
Michela Tindera
Under a Trump presidency in tech, who would you say would be the biggest winner?
Stephen Morris
Elon Musk.
Michela Tindera
What about the biggest loser?
Stephen Morris
Anyone Elon Musk takes against.
Michela Tindera
Stephen, thanks for your time.
Stephen Morris
Thank you so much.
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Michela Tindera
Next up, we’re gonna talk about the energy sector: oil, gas, fracking, renewables, all of it. So to do that, I’m joined by Jamie Smyth, the FT’s US energy editor here in New York. Hey, Jamie. How are you?
Jamie Smyth
I’m good. Hello, Michela.
Michela Tindera
OK. So to start off, I want to talk about the energy sector under the Biden administration. How have things been going over the last four years? Just give me a temperature check.
Jamie Smyth
So the oil and gas sector really viewed Biden as a threat to their industry. You know, he had a very strong regulatory agenda. He had a lot of climate policies. And he was also willing to attack the industry publicly. He famously accused Exxon of making more money than God after Russia’s invasion of Ukraine when the price of oil went through the roof. So it’s no surprise that the oil industry was among the top donors to Trump’s campaign.
Now, a major theme in Biden’s presidency was the surge in green energy investments. He passed the Inflation Reduction Act — his flagship climate law — and that has attracted 450bn in investments into solar, wind, low-carbon tech. And you’ve begun to see the beginning of US supply chains being built up to help grow these industries.
Michela Tindera
Yeah. You mentioned that oil and gas company executives were some of Trump’s big donors to his campaign. So what was the immediate reaction among the energy sector to Trump’s win?
Jamie Smyth
Well, the oil and gas companies are celebrating. Halliburton and Williams‘s chief executives on last week’s earnings calls were really upbeat. They’re saying this is gonna be a huge boon for their industry. In contrast, we’ve seen in the renewables sector share prices diving after Trump’s victory. SunPower was down 30 per cent, Plug Power was down 20 per cent. So, you know, they’re very worried.
Michela Tindera
What are your sources telling you could be the biggest changes for the energy sector over the next four years once Trump takes office? What are you seeing as the big themes?
Jamie Smyth
So Trump on the campaign trail put out a huge laundry list of things that he wanted to achieve in these particular areas of energy and climate. And I think we’re gonna see a lot of them put into place. So, for example, Biden’s regulatory agenda is gonna be unpicked. You know, I think you’re gonna see the tough methane emissions rules, the power plant emissions rules, which he put in place. I think they’re gonna be scrapped, particularly if Trump gets full control of the House. He’s gonna withdraw the US from the Paris climate agreement.
And potentially, he’s gonna withdraw the US from the UN framework as well, which makes it really difficult for the US to get back in. You can expect Trump to open up federal lands for drilling. You can expect him to open up the Alaskan wilderness for drilling for oil. You can see far more leases being offered in the Gulf of Mexico for offshore drilling. But I think it’s unclear if we’re actually gonna see an increase in oil and gas production because it takes time to drill. And critically, oil prices at the minute are falling because of weak global demand. So the last thing that industry wants to do is drill, baby, drill, as Trump is suggesting, which could crash prices and hit their profits. So I think that’s one caveat that we have to mention here.
Michela Tindera
One area of the energy sector that’s made some big gains this year is nuclear power. So I’m curious, what is Trump’s position on it?
Jamie Smyth
So nuclear is one of the really few areas in energy and climate policy where you get bipartisan agreement that nuclear expansion is a good thing. So both the Republicans and the Democrats are in favour of nuclear power. The Democrats have put in a huge amount of federal investment into the sector. So I think under Trump there would be that continuation of supportive policies, but potentially there might not be as many tax dollars flowing into the sector. There’s huge public subsidies pushed into the nuclear sector. If that’s scaled back, then there’s gonna be less avenues for the nuclear sector to tap into.
Michela Tindera
So under a Trump presidency, looking at the energy sector, who do you expect to be the biggest winner?
Jamie Smyth
I think the oil and gas industry is certainly the biggest winner. They’re gonna have a lot more freedom to get their hands on leases and permits. So they’re undoubtedly the winners.
Michela Tindera
Who do you expect to be the biggest loser?
Jamie Smyth
I think certainly the biggest loser’s probably gonna be the renewables sector, in particular offshore wind, which Trump has targeted as a sector that he particularly does not like. I think solar and wind will continue to grow because there’s no stopping the energy transition. But it could grow at a slower pace because there’s gonna be less money around to subsidise it.
Michela Tindera
Well, Jamie, thanks for stopping by.
Jamie Smyth
Thank you very much.
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Michela Tindera
Behind the Money is hosted by me, Michela Tindera. Saffeya Ahmed is our producer. Sound design and mixing by Sam Giovinco and Joseph Salcedo. Topher Forhecz is our executive producer. Cheryl Brumley is the global head of audio. Original music is by Hannis Brown. Thanks for listening. See you next week.
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