Investors believe the stock market could see headwinds under a Biden presidency

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  • CNBC polled more than 100 chief investment officers and portfolio managers about where they stood on stocks under a new administration.
  • Two-thirds said the first four years of Biden presidency will be worse for stocks than Trump’s term.
  • Still, Wall Street is optimistic that the Dow Jones Industrial Average will reach new highs next year.

Wall Street investors largely believe a Joe Biden presidency could mean lower stock-market returns, according to a new CNBC survey. 

As a part of CNBC’s Quarterly Report, we polled more than 100 chief investment officers, portfolio managers and CNBC contributors who manage money about where they stood on the upcoming year for stocks under a new administration. The survey was conducted from Dec. 14 to Dec. 23.

Two-thirds said the first four years of Biden will be worse for stocks than Trump’s term.

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Since Trump’s inauguration in January 2017, the S&P 500 has rallied more than 60% thanks in part to the president’s landmark corporate tax cut that led to a surge in profits and a record in share buybacks. The Trump administration has also relaxed many regulations over the last four years, creating a market-friendly environment for oil and other industries.

Many investors worry that a reversal of the tax cut, which Biden has pledged, could take a big bite out of earnings at a time when market valuations are sitting at multiyear highs. Biden’s tax plan calls for raising capital gains rates for high earners.

While investors believe Biden’s policies could create headwinds for the overall market, some sectors would fare better than others. Consumer discretionary, industrials and financials will perform the best under a Biden administration, according to the survey.

Utilities, consumer staples and energy could have a hard time outperforming, the survey said.

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