(Bloomberg) Stocks rose toward record highs after expectations that an assassination attempt on President Donald Trump would put him in control of the White House and spark market volatility failed to materialize.
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All major stock indexes rose, with the S&P 500 on track to hit its 38th record this year. Trump Media Technology Group soared 30%. Trump’s increased chances of winning boosted oil producers, gun manufacturers and private prisons. Trump’s pro-cryptocurrency stance boosted bitcoin and companies in the industry. Tesla surged after Elon Musk endorsed Trump. Solar and cannabis companies fell as Democrats were seen as favorable to those sectors.
Beliefs that Trump would pursue an expansionary fiscal policy if he wins the November election pushed the yield on the 30-year U.S. Treasury note above the yield on the two-year note for the first time since January. The dollar was little changed.
“The assassination attempt on former President Trump was a shock, but markets will likely digest the news quickly and without much fuss,” said John Stoltzfus of Oppenheimer Asset Management. “The shocking event will not deter investors, who are expected to remain focused on the economy and earnings results.”
The S&P 500 rose to 5,640. Large-cap stocks were mixed. Apple hit a new high after being named Morgan Stanley’s top pick. Nvidia fell. The Russell 2000, an index of smaller companies, rose 2%. Goldman Sachs Group Inc. rose after surging profits outpaced plans to ease the pace of share buybacks. Macy’s Inc. fell after it ended takeover talks.
With few economic data releases scheduled, traders will be focused on Federal Reserve speeches, most notably from Jerome Powell on Monday. Goldman economists said there is a “solid case” for the Fed to cut interest rates in July.
“The only reason they won’t cut rates in July is some systematic, naive thinking that ‘we need to prepare the market for a cut,'” said Neil Dutta of Renaissance Macro Research. “I don’t know, but that’s the reality.”
For Mark McCormick of TD Securities, the market seems “less worried about the election” and more eager to celebrate US data surprises, particularly the latest drop in the Consumer Price Index.
“Everyone is promoting their favorite Trump trades, but I think we’ve learned over the past century that stock market movements are more random than anything a president can dictate,” said Peter Boockvar of the Book Report.
The Republican front-runner who was shot at a rally in Pennsylvania on Saturday has a better chance of winning a second term following the attack, according to data from PredictIt.
The Republican National Convention, taking place in Milwaukee from Monday to Thursday, marks the culmination of Trump’s dominance of the party. The former US president told Fox News he plans to announce his running mate today, according to a post by X.
Jay Woods of Freedom Capital Markets said there could be “a bit of a pullback, a Trump surge, so to speak,” and some volatility as political rhetoric heats up leading up to the Republican National Convention.
A US judge has dismissed a criminal case accusing President Donald Trump of mishandling classified information, nearly two years after FBI agents searched his Florida mansion for lost state secrets and in a rare development as he seeks to retake the White House.
Election years are generally good for stocks, and unless there is a major market trouble like the dot-com bubble burst or the financial crisis, the S&P 500 index tends to post solid gains. In fact, the index has risen in almost every election year since 1960, except for 2000 and 2008. This record has improved in recent years: in the three election years since 2008, namely 2012, 2016, and 2020, the index has risen by at least 10%.
Meanwhile, signs of further weakening in Chinese demand led to most non-metal prices falling.
Company Highlights:
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BlackRock Inc. pumped $51 billion from clients into its long-term investment funds in the second quarter, helping the world’s largest asset manager reach a record $10.6 trillion in assets.
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JPMorgan Chase & Co. became the first of the six biggest U.S. banks to enter the investment-grade bond market after reporting second-quarter earnings, paving the way for what is expected to be a flood of bond issuance from Wall Street.
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AutoNation Inc., one of the largest car dealership chains in the United States, warned that a cyberattack that crippled retail stores nationwide until earlier this month had caused a significant hit to its second-quarter profits.
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IBM’s proposed $6.4 billion takeover of software maker HashiCorp will undergo a thorough antitrust review by the Federal Trade Commission.
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Google parent Alphabet is in talks to buy cybersecurity startup Wizz Inc, according to people familiar with the matter.
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Cleveland-Cliffs Corp. has agreed to buy Canadian steelmaker Stelco Holdings Inc. for about C$3.85 billion ($2.8 billion), its first big move since losing a bid to buy United States Steel Corp. last year.
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U.S. safety investigators said in a preliminary report that the crew of a Southwest Airlines flight that took off from a closed runway in June missed important notices warning of the closure.
Major events this week:
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German ZEW survey forecast, Tuesday
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U.S. retail sales, business inventories Tuesday
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Morgan Stanley, Bank of America earnings Tuesday
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Federal Reserve President Adriana Kugler to speak Tuesday
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Eurozone Consumer Price Index, Wednesday
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US housing starts, industrial production Wednesday
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Fed Beige Book, Wednesday
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Fed President Thomas Barkin to speak Wednesday
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ECB interest rate decision Thursday
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US initial jobless claims, Philadelphia Fed manufacturing index, Conference Board LEI, Thursday
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Federal Reserve Board members Mary Daly, Laurie Logan and Michelle Bowman to speak Thursday
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Fed’s John Williams and Raphael Bostic to speak on Friday
Some of the key market developments:
stock
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The S&P 500 was up 0.6% as of 12:25 p.m. New York time.
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The Nasdaq 100 rose 0.6%.
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The Dow Jones Industrial Average rose 0.7%.
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The MSCI World Index rose 0.3%.
currency
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The Bloomberg Dollar Spot Index rose 0.2%.
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The euro was little changed at $1.0905
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The British pound fell 0.1% to $1.2974.
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The Japanese yen was almost unchanged at 157.92 yen to the dollar.
Cryptocurrency
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Bitcoin rose 5.2% to $63,227.46.
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Ether rose 5.6% to $3,380.18.
Bonds
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The yield on the 10-year Treasury note rose 3 basis points to 4.21%.
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German 10-year government bond yields fell 2 basis points to 2.47%.
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UK 10-year government bond yields were little changed at 4.10%
merchandise
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West Texas Intermediate crude oil fell 0.1% to $82.11 a barrel.
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Spot gold rose 0.9% to $2,431.96 an ounce.
This story was produced with assistance from Bloomberg Automation.
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