Stocks rise as election volatility jitters fade: Markets Wrap

(Bloomberg) — Stocks hit record highs as predictions of high market volatility failed to materialize after Donald Trump’s assassination attempt boosted his chances of taking the White House.

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All major stock indexes gained, with the S&P 500 set for its 38th record high this year. Trump Media & Technology Group Corp. rose 35%. The candidate’s rising odds of victory boosted oil producers, gunmakers and private prisons. His pro-crypto stance lifted Bitcoin and crypto companies. Tesla Inc. rallied as Elon Musk endorsed Trump. Solar energy and marijuana companies sank as Democrats are seen as more friendly to the industry.

U.S. 30-year bond yields rose above the two-year yield for the first time since January on bets that Trump would pursue expansionary fiscal policy if he wins the November election. The dollar was little changed.

“We were shocked by the assassination attempt on former President Trump, but we suspect markets will digest the news quickly and with little fanfare,” said John Stoltzfus of Oppenheimer Asset Management. “Shocking events tend not to deter investors, who we expect to remain focused on economic and earnings results.”

The S&P 500 rose to 5,650. A gauge of megacaps, the “Magnificent Seven,” rose 2%. The Russell 2000 of smaller companies also added 2%. Apple Inc. hit a new high after being named a top pick by Morgan Stanley. Goldman Sachs Group Inc. gained as a surge in profits outweighed plans to moderate the pace of buybacks. Macy’s Inc. fell after ending takeover talks.

With little economic data scheduled, traders are set to pay close attention to speakers from the Federal Reserve. Among the highlights: Jerome Powell speaks on Monday. Economists at Goldman Sachs said they “see a solid case” for a Fed rate cut in July.

For Mark McCormick of TD Securities, markets appear “less concerned about the election” and much more interested in riding the wave of surprises in US data, especially the latest consumer price index reading.

“Everyone is touting their favorite Trump trades — but I think we’ve seen over the last century that stock market movements are more random than what a president can dictate,” Peter Boockvar said in The Boock Report.

The chances of the presumptive Republican nominee, who was shot at a Pennsylvania rally on Saturday, winning a second term have increased following the attack, according to data from PredictIt.

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The Republican National Convention in Milwaukee, held Monday through Thursday, marks the culmination of Trump’s takeover of the party. The former US president told Fox News he will make his vice presidential pick public today, according to a report in X.

“We could see a bit of a bounce, a Trump surge, if you will,” and we could see some volatility as political rhetoric heats up at the Republican Convention, said Jay Woods of Freedom Capital Markets.

Election years are typically good for stocks, and barring major market setbacks like the dot-com bust or the Great Financial Crisis, the S&P 500 Index tends to post robust gains. In fact, the benchmark index has risen in nearly every election year since 1960, with the exception of 2000 and 2008. That record has improved even further in recent years. In all three election years since 2008 — 2012, 2016, 2020 — the benchmark index has risen at least 10%.

Corporate Highlights:

• BlackRock Inc. raised $51 billion in client money for its long-term investment funds in the second quarter, taking the world’s largest money manager to a record $10.6 trillion in assets.

• JPMorgan Chase & Co. became the first of the six largest U.S. banks to tap the investment-grade bond market after reporting second-quarter earnings, paving the way for an expected wave of issuance on Wall Street.

• AutoNation Inc., one of the largest U.S. car dealership chains, warned that the cyberattack that crippled retailers nationwide through earlier this month cost the company a significant portion of its second-quarter profits.

• International Business Machines Corp.’s proposed $6.4 billion acquisition of software maker HashiCorp Inc. will undergo an in-depth antitrust review by the U.S. Federal Trade Commission.

• Google parent Alphabet Inc. is in talks to acquire cybersecurity startup Wiz Inc., according to a person familiar with the matter.

• Cleveland-Cliffs Inc. agreed to buy Canadian steelmaker Stelco Holdings Inc. for about C$3.85 billion ($2.8 billion), the company’s first major move after losing its bid for United States Steel Corp. last year.

Main events of this week:

• Germany ZEW survey expectations, Tuesday

• U.S. retail sales, business inventories, Tuesday

• Morgan Stanley and Bank of America Earnings, Tuesday

• Fed’s Adriana Kugler speaks Tuesday

• Eurozone CPI, Wednesday

• U.S. housing starts, industrial production, Wednesday

• Beige Book Fed, Wednesday

• Fed’s Thomas Barkin speaks Wednesday

• ECB rate decision, Thursday

• US Initial Jobless Claims, Philadelphia Fed Output, Conference Board LEI, Thursday

• Fed’s Mary Daly, Lorie Logan and Michelle Bowman Speak Thursday

• Fed’s John Williams and Raphael Bostic speak Friday

Some of the main movements in the markets:

Actions

• The S&P 500 was up 0.7% as of 11:31 a.m. ET.

• The Nasdaq 100 rose 0.9%

• The Dow Jones Industrial Average rose 0.6%

• The Stoxx Europe 600 fell 1%

• MSCI World Index rose 0.4%

Coins

• The Bloomberg Dollar Spot Index rose 0.1%

• The euro was little changed at $1.0910

• The British pound remained virtually unchanged at $1.2980

• The Japanese yen was virtually unchanged at 157.87 per dollar

Cryptocurrencies

• Bitcoin rose 5% to $63,115.72

• Ether rose 5.4% to $3,373.45

Titles

• The yield on the 10-year Treasury note rose three basis points to 4.22%

• The yield on German 10-year bonds fell two basis points to 2.47%

• The yield on UK 10-year debt remained virtually unchanged at 4.10%

Products

• West Texas Intermediate crude fell 0.5% to $81.84 a barrel

• Spot gold rose 0.9% to $2,434.06 an ounce

This story was produced with assistance from Bloomberg Automation.

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