Wall Street surged Monday as Trump’s survival boosted his reelection odds, while hopes for interest-rate cuts lifted market sentiment.
Under Trump, markets anticipate stricter trade policies while also expecting looser regulations on energy policy and cryptocurrency.
The S&P 500 and Dow hit record highs, while Treasury yields rose, as investors anticipate inflation from Trump’s policies.
After an assassination attempt on Saturday, PredictIt showed Trump’s election win bets rose to 67 cents, Biden’s at 26 cents.
“The narrative for the day rests on the “Trump Trade,” with many investors assuming the weekend events add to the former President being re-elected,” said Bob Savage, head of markets strategy and insights at BNY Mellon.
Trump-linked stocks surged: Trump Media & Technology Group jumped 26.8%, while Phunware and Rumble rose 4.6% and 5.4%, respectively.
Crypto stocks surged with Bitcoin’s two-week high; consequently, Coinbase Global, Marathon Digital, and Riot Platforms advanced 8.9%-10.9%.
Stocks benefiting from Trump’s potential second term rose; Smith & Wesson gained 11.9%, and GEO Group increased by 10.5%.
Hopes for Fed rate cuts kept traders optimistic, with an 88% chance of a 25-basis-point cut by September, per LSEG.
Comments from Fed Chair Powell and SF Fed President Daly will be closely watched for their take on last week’s inflation data.
The small-cap Russell 2000 rose 2.2%, reaching its highest level since January 2022, showing continued broad-based market gains.
As quarterly earnings season begins, it’s uncertain if megacaps can justify high valuations or if lagging sectors can sustain recent gains.
Ben McMillan, IDX Advisors’ CIO, expects ongoing rotation from tech megacaps to small caps, contingent on strong earnings.
As of 12:01 a.m. ET, the Dow rose 328.71 points to 40,329.61, the S&P 500 climbed 40.53 points to 5,655.88, and the Nasdaq gained 163.54 points to 18,561.98.
The S&P 500 financials index surged by 1.5%, boosted by Goldman Sachs reaching a record high as its second-quarter profits more than doubled.
Macy’s shares plummeted by 12.9% following the company’s decision to end buyout talks with Arkhouse Management and Brigade Capital.
On the NYSE, advancing issues outweighed decliners by a ratio of 1.93-to-1, while on the Nasdaq, the ratio was 1.91-to-1.
The S&P index achieved 56 new 52-week highs and one new low, while the Nasdaq recorded 179 new highs and 26 new lows.
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