Why Bank of America, Visa and Capital One are going bankrupt after a Trump victory

Bank stocks jumped after numerous publications and major television networks declared Donald Trump the election winner and the future 47th President of the United States. The SPDR S&P Regional Banking The exchange-traded fund was trading nearly 11% higher as of 10:45 a.m. ET, the biggest one-day move I can remember in covering bank stocks.

Shares in the country's second largest bank, Bank of America (NYSE:BAC)traded nearly 7% higher. Shares are now available from visa (NYSE:V) traded nearly 4% higher, while shares of Capital one (NYSE:COF) had exploded nearly 20% at one point this morning before giving back some of those gains.

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I wrote last week that bank stocks would be one of the big beneficiaries of a Trump victory. While it's not exactly a campaign issue for either party, banking regulators have cracked down on bank stocks under the Biden administration. They have delayed approval deadlines for mergers and acquisitions, and proposals for stricter capital and liquidity rules have abounded in the industry for some time. During his first term as president, Trump introduced deregulation of the sector. Republicans also flipped the Senate and were able to take control of the U.S. House of Representatives.

“Donald Trump is the candidate where you ignore what he says and focus on what you want him to say,” TD Cowen analyst Jaret Seiberg wrote in a recent research note, according to CNBC. “That's why he's promising deregulation for the financial sector, as his regulators are likely to roll back much of the CFPB's (Consumer Financial Protection Bureau) enforcement agenda and reconsider safety and soundness changes for big banks.”

Trump will also be able to appoint a new US attorney general and new officials at the US Department of Justice (DOJ), which could greatly benefit companies like Visa and Capital One. The DOJ under Biden has pursued multiple antitrust lawsuits against major companies in multiple sectors. The company recently sued Visa over its debit card practices, claiming the company used unfair powers to charge transaction fees it couldn't charge in a competitive market. The New York Attorney General's Office also recently launched an investigation into Capital One's proposed merger Discover financial services and whether it violates state antitrust laws.

It's still early and I don't think anyone knows for sure how Trump will handle antitrust cases. However, with people like Elon Musk and JD Vance expected to have a strong influence on the Trump administration, I think it's unlikely that a Trump Justice Department would be as aggressive on antitrust as the Biden DOJ.

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