Small and Mid-Cap Stocks in 2025: Corporate Tax Policy and M&A Environment Impact

Global equity markets have been readjusting to reflect the anticipated realities of President-elect Trump’s second presidential term. The market consensus seems that his administration will be characterized by stimulative, pro-growth fiscal policies, much like his first term in 2016.US equities, cryptocurrency, and the dollar rallied.

Mid- and small-cap indexes may continue to exhibit more pronounced effects. These equity segments tend to be more reliant on domestic revenue sources, and they consequently pay more significant portions of their taxes overall to the U.S. government. Reducing the corporate tax rate may provide greater relief for these asset classes than for large caps, whose geographic revenue sources are more diversified.

We anticipate that mid-caps and small caps would absorb more benefit from slashing the statutory rate, with nearly the entire 5% tax reduction visible in the change to their effective tax rates. This may boost earnings by 5%–6% and provide a much-needed tailwind for both asset classes. This sector has notably underperformed its large-cap peers over the last decade.

Though changes to corporate tax policy are never a foregone conclusion, we believe the joint presidential and congressional election outcomes may create additional strong catalysts for equities. The expectation of lower corporate taxes, deregulation, and leadership changes at key regulatory agencies all point an M&A environment with both increased transactions and larger deals under a Trump presidency.

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Small businesses can capitalize on Small Business Saturday with some planningSmall Business Saturday — the Saturday after Thanksgiving — is coming up. But it doesn’t always translate to big sales for small businesses. There are some things small business owners should keep in mind when marketing themselves for the big holiday shopping weekend.
Source: AP - 🏆 728. / 51 Read more »

Alabama Governor Encourages Support for Small Businesses on Small Business SaturdayAlabama Governor Kay Ivey has declared the Saturday following Thanksgiving as Small Business Saturday, emphasizing the vital role small businesses play in the state's economy and communities. The governor encourages residents to support local businesses during the holiday season.
Source: wsfa12news - 🏆 338. / 59 Read more »

BBB Urges Shoppers to Support Small Businesses on Small Business SaturdayThe Better Business Bureau (BBB) is encouraging consumers to allocate some of their Black Friday leftovers to Small Business Saturday, promoting the use of local and independent businesses. The BBB highlights the significant economic impact this day has on small businesses and their communities, and suggests ways for shoppers to find and support these establishments.
Source: komonews - 🏆 272. / 63 Read more »

Small Business Saturday 2024: LA County cities offering incentives to shop smallSmall Business Saturday generated close to $17 billion in 2023.
Source: FOXLA - 🏆 445. / 53 Read more »

Small-Cap Stocks Reach Record Highs After Three Years, Attracting More InvestorsSmall-cap stocks have witnessed a remarkable comeback, achieving their first record highs in three years. An ETF expert anticipates this trend will lure more investors seeking to diversify their portfolios.
Source: NBCLA - 🏆 319. / 59 Read more »