What is Trump's 'Big Beautiful Bill' and how does it affect stocks?

Trump's 'Big Beautiful Bill' is legislation that recently advanced through the U.S. Senate. It focuses on making the 2017 tax cuts permanent while increasing government spending in three key areas: defense, border security, and domestic energy production. For stocks, this means companies in these sectors could potentially receive more government contracts, benefit from tax savings, and see increased demand for their products and services. The stocks in this group were selected specifically because they operate in these sectors and could directly benefit from this legislative initiative.

Why are defense contractors included in this stock group?

Defense contractors like Lockheed Martin, Northrop Grumman, and Raytheon are included because they would be direct beneficiaries of increased defense spending proposed in the bill. These companies develop and manufacture military equipment, aerospace technology, and defense systems that the government purchases. When defense budgets increase, these companies typically receive larger contracts for their products and services, which can positively impact their revenue, earnings, and potentially their stock prices.

How do energy companies benefit from this legislation?

Energy companies like Exxon Mobil, Chevron, and ConocoPhillips stand to benefit in multiple ways. First, the bill aims to promote domestic energy production through favorable policies and regulations. Second, these companies would benefit from the permanent extension of corporate tax cuts, improving their after-tax profits. Additionally, companies that provide infrastructure for energy transport (like Enterprise Products Partners) or services for energy production (like Halliburton and Schlumberger) could see increased business as domestic energy activity expands under the proposed legislation.

What does "Potential Profit %" mean in the stock data?

"Potential Profit %" refers to the estimated percentage increase in a stock's value that analysts predict could occur over a specific time period (often 12 months). It represents the difference between an analyst's target price for the stock and its current market price, expressed as a percentage. This metric gives investors an idea of how much upside potential experts believe exists for a particular stock. However, it's important to remember that these are estimates and actual performance may differ significantly from these projections.

What are the risks of investing in policy-driven stock groups like this one?

Policy-driven investments carry specific risks worth considering. First, legislation can change significantly before final passage or may not pass at all, which could impact the expected benefits for these companies. Second, even if the legislation passes, the actual implementation and funding might differ from initial proposals. Additionally, market reactions to policy changes can be unpredictable, and other factors (economic conditions, company performance, industry trends) still affect stock prices. As with any investment, diversification and understanding your risk tolerance are important when considering policy-influenced stock groups.

15 handpicked stocks

Trump's 'Big Beautiful Bill' Beneficiaries

Companies positioned to thrive under Trump's major fiscal bill that just passed a key Senate vote. These stocks were carefully selected by our analysts from sectors that would directly benefit from permanent tax cuts and increased spending on defense, border security, and energy.

Han Tan | Market Analyst

Updated 2 days ago | Published at June 30