The 2024 elections, from the U.S. to Europe, signal a shift in the global political landscape. What does this mean for stock markets in 2025?
The 2024 elections marked a watershed moment for the international political landscape, with profound implications likely to reverberate across global economic balances in 2025.
In Europe, the rise of right-wing forces and significant voter abstention in several countries signal a deepening political polarization.
Meanwhile, across the Atlantic, the return of Donald Trump to the U.S. presidency has reignited debates on nationalism, protectionism, and relations with international institutions.
These developments are already reshaping international relations and beginning to influence market dynamics.
Could we be on the brink of a major shift in global market balance in the coming year?
The 2024 European Elections: A Fragmented and Polarized Landscape
The European elections of June 8-9, 2024 revealed heightened political fragmentation.
In Italy, Brothers of Italy, led by Giorgia Meloni, solidified its position with 28.8% of the vote.
In Germany, the CDU/CSU maintained its lead with 30%, but the surge of the Alternative for Germany (AfD) to 15.9% underscored the growing influence of euroscepticism.
France witnessed a historic win by Marine Le Pen’s Rassemblement National, prompting President Macron to call new elections.
Similarly, in Austria, the Freedom Party of Austria (FPÖ) achieved dominance.
These results point to a common European trend: the rising influence of right-wing forces and the weakening grip of traditional parties.
Despite the polarization, Ursula von der Leyen was re-elected as President of the European Commission on July 18, 2024, with 401 votes in favor.
Her re-election reflects a desire for institutional stability, though the fragmented European Parliament will likely lead to complex negotiations.
The growing prominence of right-wing factions is expected to shape policy priorities, particularly regarding immigration, security, and national sovereignty.
ETFs such as the Vanguard FTSE Europe ETF (VGK) are being closely monitored by analysts to gauge the impact of these political changes on financial markets in 2025.
The United States: The Return of Donald Trump
The 2024 U.S. presidential election saw Donald Trump return to the White House, ushering in a new era of Republican leadership.
Campaigning on an "America First" platform, Trump capitalized on dissatisfaction with the previous administration, emphasizing immigration, trade, and national security.
His return reflects a significant portion of the American electorate’s preference for protectionist and nationalist policies, including a focus on strengthening domestic industries and reducing external dependencies.
On the international stage, Trump’s presidency is poised to intensify trade tensions with China, potentially extending the tariff wars of his first term.
Simultaneously, his administration’s stance on international institutions like NATO and the UN could reshape the global geopolitical landscape, favoring bilateral engagements over multilateral frameworks.
Convergences Between Europe and the U.S.: The Rise of the Right
The parallel rise of right-wing movements in Europe and Trump’s leadership in the U.S. presents opportunities for ideological and strategic alignment across the Atlantic.
Shared priorities include a strong emphasis on national sovereignty, skepticism of supranational organizations, and stricter immigration policies.
Climate policy represents another potential area of alignment—or divergence.
Both Trump and many European right-wing parties have shown resistance to restrictive environmental measures, prioritizing short-term economic growth over sustainability.
This could weaken global commitments to reduce carbon emissions, with broad implications for environmental and energy-transition sectors.
ETFs such as the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) could benefit from deregulated environmental policies, while renewable energy funds like the iShares Global Clean Energy ETF (ICLN) might face headwinds.
Market Impacts in 2025
The evolving political landscape is poised to exert significant influence on global markets, with varied implications across sectors. Less restrictive environmental policies could benefit the oil and gas industry, driving increased capital flows.
Simultaneously, rising defense budgets—a hallmark of right-wing governments—could bolster defense and aerospace industries.
Manufacturing and heavy industry may gain from protectionist measures encouraging domestic production and reducing import reliance.
Conversely, sectors dependent on global supply chains, such as technology, could face headwinds from heightened U.S.-China trade tensions and potential European tariffs.
ETFs tied to defense and manufacturing, such as the SPDR S&P Aerospace & Defense ETF (XAR) and iShares U.S. Industrials ETF (IYJ), stand to gain.
However, funds representing technology firms with global operations, including the Invesco QQQ Trust (QQQ), might experience volatility due to trade restrictions.
The luxury goods sector also faces challenges. Economic uncertainty and geopolitical tensions could dampen demand in key markets like the U.S. and China, forcing European luxury firms to reassess growth strategies.
Original article published on Money.it Italy 2024-12-10 15:12:04. Original title: L’impatto delle elezioni del 2024 potrebbe alterare gli equilibri del mercato del 2025
