Failed assassination attempt on Trump sends mixed signals to markets
A failed assassination attempt on Donald Trump during a campaign rally in Pennsylvania has sparked mixed reactions in global financial markets. Futures contracts on major American stock indices show slight increases, while European markets are experiencing declines.
It appears that investors are still analysing how the assassination attempt on Donald Trump might affect his chances in the upcoming presidential elections in the United States. The situation assessment is not straightforward—it depends on whether we consider the American or European market.
Contracts on the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite show slight increases of 0.01%, 0.02%, and 0.05%, respectively. These increases contrast with the situation on European exchanges, where indices are showing declines following the assassination attempt on the former U.S. president on Saturday. Trump was shot in the ear during a rally in Butler, but reports indicate his condition is stable.
Market analysts interpret the investors' reaction as a sign that the assassination attempt might increase Trump's chances of winning the November elections. Chris Weston, head of research at Pepperstone, predicts an increase in futures contracts on the S&P 500 and a strengthening of the dollar, arguing that Trump promises deregulation of American industries, which could drive stock market gains.
Impact on specific sectors and companies
The market's reaction to the assassination attempt is visible in the stock prices of individual companies. Gun manufacturer Smith & Wesson Brands is gaining 3.5% in pre-market trading, a typical reaction to this event. Gun manufacturers' stocks often rise after such incidents, as concerns about stricter gun control prompt some consumers to increase their purchases.
Companies in the prison sector, such as Geo Group and CoreCivic, are also seeing significant increases, exceeding 7% in pre-market trading. Investors speculate that Trump's presidency could mean stricter immigration policies, potentially increasing demand for prison services.
Insurance stocks Humana and UnitedHealth Group are gaining around 3% in the healthcare sector. Analysts suggest these companies could benefit from less cost pressure from a Republican administration. At the same time, some financial institutions, like Goldman Sachs, are experiencing slight declines despite positive second-quarter financial results.
Investors are not focusing on a single event
Financial markets react to political events, macroeconomic data, and company results. BlackRock, the world's largest asset manager, is gaining 1% in pre-market trading after announcing better-than-expected second-quarter results.
Investors are currently pricing over a 90% chance of a 0.25 percentage points rate cut by September and are considering two rate cuts this year. This prospect affects the bond market, where yields are rising. The yield on 10-year U.S. Treasury bonds increased by 0.05 to 4.24%.
The dollar is slightly strengthening in the currency market, while the euro is maintaining its position. Oil prices are showing slight declines. The VIX index, known as the fear index, measuring expected market volatility, is falling to 12.83 points, suggesting that investors do not expect significant turmoil shortly.
