In recent months, populist sentiment has sprung a few surprises, including the election of President Donald Trump and Britain’s vote to leave the European Union.

Although some populist policies may prove economically sound, those producing trade wars could be a threat.

[See: 8 Ways President Donald Trump Will Affect Wall Street.]

The current mood among populists in the U.S and Europe can be traced back to the global financial crisis and the desire to punish the banks, says George Maris, portfolio manager with Janus Capital Group. The sentiment is that the economic and political system has failed people.

But Maris believes closing off avenues of trade would only be economically detrimental. Even though nations haven’t done a good job of taking care of the people free trade has harmed, it remains a net benefit to countries, he says.

If free trade gets rolled back with countries retaliating against protectionist policies, gross domestic product growth could decline. Goods would become more expensive, and the number of jobs and wages would be lower than they would have been otherwise, Maris says.

“Populism was and is the biggest risk to equity markets globally,” he says. “You can’t hurt one economy without hurting many others.”

Domestically, populism could be a mixed bag.

In the U.S., tax cuts and government spending on the military and infrastructure should boost the economy, says Jeff Powell, managing partner with Polaris Greystone Financial Group.

[See: The Top 10 Investment Portfolio for Millennials.]

But economic nationalism can be taken too far. If Trump renegotiates the North American Free Trade Agreement in a way that leads to retaliation, that will hurt consumers, Powell says.

There are signs for optimism. Despite withdrawing from the Trans-Pacific Partnership free trade agreement, the Trump administration appears willing to have constructive discussions about NAFTA, Maris says. And the results of recent U.S.-China trade discussions offer a marginally better picture for trade between the two countries than what existed before.

The deal with China should benefit the U.S. cattle and energy industry, says Chris Bertelsen, chief investment officer with Aviance Capital Management.

Christopher Markowski, founder of Markowski Investments and host of the “Watchdog on Wall Street” radio program, says “populism is a necessary reaction” to economic and social policies that have left people behind.

Markowski believes the anti-European Union movement is a good thing if it leads to better trade and tax policies. Unwinding regulations would help Europe grow economically, enabling Europeans to buy more American products, he says.

Bertelsen notes that much of today’s populist sentiment is just talk that won’t necessarily change how people do business.

For Bertelsen, company earnings and guidance are a better way to take the market’s pulse than political rhetoric. First-quarter earnings have been “impressive” and offer “a real reason for me to have continued optimism,” Bertelsen says.

Still, the administration’s trade policies and populist agenda could produce stock market winners and losers.

Companies with U.S.-based growth, such as Home Depot (ticker: HD), Toll Brothers ( TOL) and D.R. Horton ( DHI), should do better than international companies if trade wars lead to tariffs, Bertelsen says.

Domestically, aerospace and defense companies, such as Boeing ( BA), Northrop Grumman Corp. ( NOC), Raytheon ( RTN) and General Dynamics Corp. ( GD) would benefit from increased military spending and saber rattling, Powell says.

But with companies in the Standard & Poor’s 500 index getting 30 percent of their revenue from abroad, according to a FactSet Research Systems report from earlier this month, there’s also plenty of room for pain, Powell says.

Information technology companies in the S&P 500 get 59 percent of their revenue abroad, according to FactSet, followed by materials at 49 percent, energy at 43 percent and industrials at 38 percent.

That means U.S.-based technology companies would be natural targets for tariffs in a trade war, Powell says. Most vulnerable would be IT consulting, storage companies or those making commoditized products like some chips.

Populist policies that harm trade could be a double whammy for U.S. investors who buy shares of U.S.-based multinationals as well as American depositary receipts of foreign companies traded in the U.S., Powell says.

[See: The Fastest Ways to Lose Money in the Stock Market.]

According to Maris, trade spats would hurt multinational companies either in the markets they sell to or in their supply chains, with trade war casualties including Apple ( AAPL), Procter & Gamble ( PG) and the Coca-Cola Co. ( KO).

If there’s a tariff dispute between the United States and Mexico, railway company Kansas City Southern ( KSU) could get hurt, Bertelsen says.

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What Populism Means for the Stock Market originally appeared on usnews.com