As Donald Trump moved forward on his campaign promise to build a wall at the Mexican border, investors quickly bet on the stocks of companies most likely to construct it.
The Dow Jones industrial average finally surpassed the 20,000 milestone Wednesday on the back of President Trump’s infrastructure project announcements, and American building stocks were among the biggest winners. Shares of Martin Marietta Materials (MLM), a maker of ready-mixed concrete and cement based in Raleigh, N.C., surged more than 3%, building up the company’s market value to $15.8 billion. Martin Marietta stock has climbed more than 6% over the past two days.
Shares of construction company Vulcan Materials (VMC), based in Birmingham, Ala., also rose more than 2%; over the past year, Vulcan is up more than 60%. Stock in U.S. Concrete (USCR), a smaller building materials company in Texas, jumped more than 4%.
Overall, the wall rally added about $2 billion in market value to those three companies. Still, that’s nothing compared to the potential opportunity they face in trying to land what is expected to be a lucrative government contract: Estimates for the cost of the border wall run as high as $12 billion, with a potential $10 billion outlay for cement alone.
Though Trump has yet to detail the specifics of the wall project, the prospect was enough to make investors salivate. On Tuesday night, Trump tweeted, “Big day planned on NATIONAL SECURITY tomorrow. Among many other things, we will build the wall!” The President plans to make a formal announcement and sign an executive order for a Mexican border wall at the Department of Homeland Security on Wednesday.
Big day planned on NATIONAL SECURITY tomorrow. Among many other things, we will build the wall!
— Donald J. Trump (@realDonaldTrump) January 25, 2017
Shares of Cemex (CX), one of the world’s largest cement manufacturers, surged more than 30% in the run-up to the election last year as Trump’s campaign gained strength. There’s one inconvenient fact about Cemex that may make it an unlikely candidate for a big U.S. Government contract: Cemex is based in Mexico. While its geographic location was perhaps once considered a boon for a company building a wall at the Mexican border, Trump has indicated that he wants U.S. Infrastructure projects to be built by U.S. Companies.
Still, Cemex stock initially rose about 2.5% Wednesday morning. It immediately flattened out as investors doubted its eligibility as a candidate to build the wall, but bullishness returned in the later afternoon and Cemex shares rallied, ending the day up 3.7%.
This story has been updated to reflect further changes in the stock price of companies mentioned.