WASHINGTON: A shooting incident targeting former President Donald Trump at a campaign rally in Pennsylvania has prompted a surge in investments and market optimism favoring his potential return to the White House, US investors said.
Donald Trump was shot in the ear during the rally on Saturday, an event authorities are treating as an assassination attempt. Despite the shocking incident, Trump, visibly bloodied but defiant, reassured supporters moments after the attack, with his campaign confirming he was unharmed.
Investors and analysts predict that the shooting could bolster Trump’s electoral prospects, echoing historical precedents where public sympathy surged for politicians following assassination attempts. Nick Ferres, Chief Investment Officer at Vantage Point Asset Management, pointed to historical examples, stating, “From memory, Reagan went up 22 points in the polls after his assassination attempt. The election is likely to be a landslide. This probably reduces uncertainty.”
Market reactions have already begun to reflect renewed confidence in a potential Trump presidency. Prior to the shooting, markets had reacted positively to prospects of a Trump administration, with the dollar strengthening and investments positioning for a steeper US Treasury yield curve. Rong Ren Goh, a portfolio manager at Eastspring Investments in Singapore, indicated that trades betting on Trump’s victory are expected to intensify in the coming week.
Investors foresee a Trump presidency influencing policy with a more hawkish trade stance, reduced regulatory oversight, and relaxed climate crisis regulations. Expectations also include potential extensions of corporate and personal tax cuts, despite concerns about escalating budget deficits under the Trump administration.
Trump’s stance on economic issues has resonated with US voters, particularly on immigration and the economy, where polls indicate a preference for Trump over President Joe Biden. Despite Biden’s administration benefiting from a robust economy with slowing inflation and low unemployment, Trump is viewed favorably by voters on economic matters, according to Reuters/Ipsos polls.
Market indicators such as the S&P 500 and Dow Jones Industrial Average have surged to record highs in response to anticipated pro-market policies under a Trump presidency. The S&P 500 alone has seen an 18% increase this year.
