Investment markets are quick to react to growing or narrowing political possibilities, so the near miss on candidate Trump’s life will surely cause maneuvering amongst investors. There’s a lot at stake as political power shifts, and the surge in the presidential candidate’s popularity after the attempted assassination has dramatically increased his already positive poll numbers. New statistics show him with a likely landslide if the vote would be held tomorrow.
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What will the reaction be in the markets? We already have some insight as candidate Trump has been climbing in the polls over the past ten days, and the markets have been responding to the move.
Rising Support
Evidence of Trump’s soaring popularity since the attempted assassination can be found in the Reuters and Ipsos poll conducted after the shooting. It shows that Trump’s approval rating among Republican voters jumped to 85%, up from 79% before the incident. An ABC News and Washington Post poll found that 58% of Americans believe Trump is a strong leader, up from 53% before the shooting. A Fox News poll showed that 62% of Republicans believe Trump is the best candidate to defeat Joe Biden in the 2024 election, up from 57% before being grazed by a would-be assassin’s bullet.
As for direct bets, Polymarket’s contract on whether Trump will win the presidency climbed ten cents after the incident, reaching 70 cents, meaning the market now sees a 70% chance he will prevail in November.
Market Reactions
While markets were closed over the weekend when the incident occurred, Bitcoin offers a glimpse into that asset class as it trades 24/7. Following the incident, Bitcoin (BTC-USD) surged to $62,372, reaching its highest level in the past 10 days, reversing the downward trend of late last week. Trump has painted himself as the most pro-crypto candidate as he has indicated that he wants to be sure that the future of crypto is shaped in the U.S. Consequently, after Trump’s popularity spiked in the polls, Bitcoin and other tokens ran up.
Other expected moves this week as markets adjust to the former president’s heightened popularity is that under a second Trump administration, investors anticipate a more hawkish trade policy, reduced regulation, and an easing of carbon footprint demands. There are also expectations of an extension of corporate and personal tax cuts, which could fuel concerns about rising budget deficits.
Trump has expressed his intention to replace Federal Reserve Chair Jerome Powell, whose term expires in 2026. The potential change in leadership at the central bank could have implications for interest rates and monetary policy.
Key Takeaway
The assassination attempt on Donald Trump has significantly altered the political landscape and market expectations. Investors are preparing for a potential Trump victory, which could lead to a more pro-market environment and heighten fiscal policy and inflation concerns. As the election approaches, market participants will closely monitor developments and adjust their strategies to take maximum advantage.
