Stock Market Ignores Trump Assassination Attempt

Even an assassination attempt on a presidential candidate could not harm him. US stocks at record highs.

By midday Monday, two days after a gunman shot and killed former President Donald Trump at a campaign rally in Pennsylvania, the Dow Jones Industrial Average and the S&P 500 had hit new highs, while the tech-heavy Nasdaq was also up.

Historically, an assassination attempt triggers a sell-off in the market, but many other factors are boosting stock performance today, such as the rise of artificial intelligence and recent progress in combating inflation.

Saturday's attack is the first time a presidential candidate or president has been injured in the United States since John Hinckley shot President Ronald Reagan outside the Washington Hilton in 1981. The Dow Jones fell 1.4% after the shooting, according to data from CFRA Research.

An unexpected event makes people react, said Sam Stovall, chief investment strategist at CFRA Research. They sell first and ask questions later because of the worry.

The failed assassination attempt on Franklin D. Roosevelt's life in 1933, before his first inauguration, caused the Dow to fall 4.3%. The index fell 2.9% after the assassination of President John F. Kennedy in 1963.

Of 10 assassination attempts, from former President Theodore Roosevelt in 1912 to President George W. Bush in 2005, the Dow Jones Industrial Average fell an average of 1.1% on the first trading day after, according to CFRA Research.

But in a departure from this trend, the stock market appears to be ignoring political divisions and violence in 2024, even as researchers warn of escalating threats and increasingly normalized attacks.

Today, a mixture of relief that former president survived The Pennsylvania attempt and the very strong fundamentals for investors, which even a particularly volatile election campaign did not obscure, have not clouded. The disconnect between sentiment on Wall Street and around American kitchen tables has been a recurring theme since the pandemic, and both campaigns are looking to capitalize on it.

The market is really focused on earnings, artificial intelligence, inflation and interest rates, all of which seem to be working in our favor, Stovall said of Wall Street investors. That's why the market has pretty much ignored what's happened.

Investors are also potentially optimistic about the prospects of a Trump victory. The former president's company's typically volatile stock, Trump Media, jumped on Monday.

With three and a half months to go until the election, the assassination attempt strengthens Trump, according to Greg Valliere, chief US policy strategist at AGF Investments. said in a note to clients On Monday, that increases the odds of a Republican victory in the House and Senate, with implications for financial markets.

“We anticipate a campaign in early 2025 to extend and expand the 2017 Trump tax cuts, accompanied by lax, business-friendly regulatory measures,” he wrote. He added that the jury was still out on whether Washington would cut spending.

Stock markets should welcome the upbeat outlook, though further tax cuts and continued high deficits could spook the bond market, Valliere wrote. And the likelihood of higher tariffs could worry investors if China and other countries retaliate.

In contrast, President Joe Biden is campaigning on a promise to raise taxes on big corporations and the wealthiest Americans, while preserving lower taxes for anyone earning less than $400,000 a year.

Of course, a lot can change in the weeks leading up to November. A strong economy, a robust job market, falling inflation and a Federal Reserve seemingly on the verge of reduce interest rates is a powerful recipe for generating profits for businesses.

It's already been a boon for stock prices and for ordinary buy-and-hold investors, who have benefited from a five-year rise in the S&P 500 of more than 85%.