5 sectors that could see an uptick in dealmaking under Trump's second presidency

• Dealmaking is set to rise with easing regulations under a Trump presidency in 2025.
• Dropping interest rates and tax cuts are further boosting market optimism.
• However, the threat of tariffs may impact sectors despite M&A growth potential.

Dealmaking is expected to boom as an easing regulatory environment under a Trump presidency takes effect next year. More specifically, a rise in mergers and acquisitions will create upside opportunities for certain industries.

The past two years have dampened big corporate activity. In 2023, markets feared potential outcomes from rising interest rates. In 2024, uncertainty around election outcomes put a halt on dealmaking, with the number of M&A deals falling below 13,000 in October 2024 from above 25,000 in 2021, according to the Institute for Mergers, Acquisitions, and Alliances.

But as interest rates continue to drop alongside the promise of corporate tax cuts, it's creating optimism about the market, says Effram Kaplan, the Managing Director at Brown Gibbons Lang & Company.

"We're expecting a bit more of a broader-based recovery," Kaplan told Yahoo Finance.

This means a wider set of sectors could be well-positioned to catch up to mega-cap tech. Kaplan expects the main beneficiary sectors to be services, private capital markets, infrastructure, and energy. Big Tech will continue to thrive, he said.

A November note from Goldman Sachs seconds that insight, adding that an easing economic environment and a stronger forecast for US growth could further push increased capital markets activity. The investment bank advises seeking out companies primed for potential M&A deals.

But there's one caveat: the looming threat of tariffs will create upward pricing pressure, which could moderate some of the effects from M&A, Kaplan noted.

Recent tariff threats toward neighboring Canada and Mexico will mean more sectors will be impacted beyond supply chain risks from China. For example, the US relies heavily on trade with Canada, especially for oil.