The Dow hit a record high in Wall Street’s upbeat trading on Monday, on a greater chance of presidential candidate Donald Trump winning a second term after surviving an assassination attempt, while interest-rate cut hopes also aided sentiment.
Under Trump, markets expect a hawkish trade policy and looser regulations over issues from climate change to cryptocurrency.
Online betting site PredictIt showed bets of an election win for Trump at 66 cents, up from Friday’s 60 cents, with a victory for Joe Biden at 26 cents.
“In a Republican administration, you’ll see a lower tax policy, lower regulatory policy… that’s typically good for stocks. We’re seeing some of that in terms of forward looking expectations from investors at this point,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
Trump-linked stocks soared, with Trump Media & Technology Group, software firm Phunware and video-sharing platform Rumble jumping between 6% and 32%.
Crypto stocks also leapt as bitcoin rose to a two-week high. Coinbase Global, Marathon Digital holdings and Riot Platforms advanced between
5.3% and 8.2%.
Wall Street Week Ahead: Expected US rate cuts have investors looking beyond big tech
Other stocks that are expected to benefit from Trump’s second term also climbed, with Gunmaker Smith & Wesson and prison operator GEO Group gaining 12.6% and 9.4%, respectively.
The Dow hit a record high, boosted by a 2% gain in UnitedHealth as health insurers also jumped on a likely Trump win.
The small-cap Russell 2000 gained 1.2% to its highest since January 2022, in continued evidence of broad-based market gains.
Investors priced in an 88% odd of a 25-basis-point rate cut by September and two cuts for 2024, according to LSEG data, even though the Fed’s last set of economic projections had indicated only one rate cut this year.
Rate cut hopes aided Friday’s strong rally, which saw the Dow and S&P 500 touch intraday record highs after cooler-than-expected inflation data, and the Russell 2000 notch its best week since November.
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