Stocks in Communication Services rise on investor optimism for sector under Trump’s second term

Stocks in the broader Communication Services group were higher on Wednesday, reacting positively to a Donald Trump victory in the 2024 presidential election, implying a favorable landscape for the sector.

Trump has been elected after securing 270 electoral votes. Republicans have also taken control of the Senate and could even secure a majority in the House as well.

Notable companies rallying in the sector include cable and media company Charter Communications (CHTR), Comcast (CMCSA), Disney (DIS), News Corp. (NWS), and Fox (FOXA). The sector was led by Live Nation Entertainment (LYV), which is up 8%.

The industry will be on the lookout as to what he might do about the important legislation known as Section 230 now that he has his own social media company, Truth Social (DJT). Social media firms should watch out for how the Trump administration deals with European lawmakers and their scrutiny of U.S. firms.

In Trump’s first term, he tried to roll back parts of Section 230—which grants immunity to social media companies for the content posted by their users and for the way they moderate it—which President Joe Biden undid during his time in the office.

Trump had also called for a ban on TikTok in his first term. During Biden’s presidency, a bill was passed to force China’s ByteDance to sell the short video content platform to avoid a ban in the U.S.

In his second term, he may grow a soft spot for the platform after he joined it in June and undo the previous administration’s doings. TikTok’s fate in the U.S. will likely be decided by June 2025.

When looking at the landscape for the TV broadcast sector, analysts at Wells Fargo said they consider the current Democratically-controlled FCC to be generally anti-consolidation. They think Republican commissioners are sympathetic to broadcast’s challenges and want to avoid the sort of collapse that befell local newspapers.

“Supportive action could come in the form of easing restrictions on in-market Big 4 duopolies or increasing the ownership cap,” Wells Fargo said on the future of the TV landscape. “If it’s a Republican FCC, then broadcast will likely consolidate.”

Except for Meta (META) and Verizon (VZ) being down marginally, all stocks in the Communication Services are positive.

Communication Services ETFs: (XLC), (VOX), (IYZ), (RSPC), and (XTL).