Stocks Up as Trump Picks VP in Generational Shift: Markets Wrap

(Bloomberg) — Stocks rose as wild volatility calls failed to materialize after Donald Trump’s assassination attempt bolstered his chances of taking over the White House. He tapped JD Vance as his running mate.

The Dow Jones Industrial Average hit an all-time high. Trump Media & Technology Group Corp. soared 31%. Conservative video-sharing platform Rumble Inc. jumped 21%. Trump’s rising odds of victory boosted oil producers, gun makers and private prisons. His pro-cryptocurrency stance lifted the industry. Tesla Inc. rallied as Elon Musk endorsed Trump. Solar firms sank as Democrats are seen as more friendly toward the sector.

Vance is 39, nearly four decades younger than Trump, 78, offering a fresh voice to Republican efforts to bolster their appeal to the working-class workers who were once a bedrock of the Democratic party in battlegrounds such as Michigan, Wisconsin and Pennsylvania. 

“The decision is crucial because one-third of US presidents throughout American history have previously occupied the position of vice president,” said Tom McLoughlin at UBS Global Wealth Management. “Moreover, in this instance, Trump’s decision effectively anoints Vance as his successor in terms of delivering a populist message to a younger generation of voters.” 

The S&P 500 topped 5,630. Apple Inc. hit a fresh high. The Russell 2000 of smaller firms added almost 2%, notching the best four-day run since 2020. Goldman Sachs Group Inc. climbed on a surge in profits. Macy’s Inc. sank after ending buyout talks. US 30-year yield rose above the two-year one for the first time since January. The dollar edged up. 

Traders also kept an eye on Jerome Powell, who said recent data has provided more confidence inflation is heading to target.

The chances of Trump winning a second term rose in the aftermath of Saturday’s shooting, according to PredictIt data.

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

To Mark McCormick at TD Securities, markets seem “less fussed about elections” and much keener to enjoy the slide in US data surprises, especially the latest consumer-price index reading.

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

Election years are typically good for stocks, and barring major market mishaps such as the dotcom bust or the great financial crisis, the S&P 500 tends to notch robust gains. In fact, the benchmark has risen in almost every election year since 1960, with the exception of 2000 and 2008. That record has improved further in recent years. In the three election years since 2008 — 2012, 2016, 2020 — the benchmark index rose at least 10%.

Corporate Highlights:

• BlackRock Inc. hauled in $51 billion of client cash to its long-term investment funds in the second quarter, pushing the world’s largest money manager to a record $10.6 trillion of assets.
• Google parent Alphabet Inc. is in talks to acquire cybersecurity startup Wiz Inc., according to a person familiar with the matter.
• International Business Machines Corp.’s proposed $6.4 billion takeover of software maker HashiCorp Inc. will undergo an in-depth antitrust review by the US Federal Trade Commission.
• Cleveland-Cliffs Inc. agreed to buy Canadian steelmaker Stelco Holdings Inc. for about C$3.85 billion ($2.8 billion), in the company’s first major move after losing out in its bid for United States Steel Corp. last year.
• The flight crew on a Southwest Airlines Co. aircraft that took off from a closed runway in June overlooked a key notice warning of the closure, US safety investigators said in a preliminary report.

Key events this week:

• US retail sales, Tuesday
• Morgan Stanley, Bank of America earnings, Tuesday
• Fed’s Adriana Kugler speaks, Tuesday
• Eurozone CPI, Wednesday
• US housing starts, industrial production, Wednesday
• Fed Beige Book, Wednesday
• Fed’s Thomas Barkin speaks, Wednesday
• ECB rate decision, Thursday
• US initial jobless claims, Philadelphia Fed manufacturing, Conference Board LEI, Thursday
• Fed’s Mary Daly, Lorie Logan and Michelle Bowman speak, Thursday
• Fed’s John Williams, Raphael Bostic speak, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.3% as of 4 p.m. New York time
• The Nasdaq 100 rose 0.3%
• The Dow Jones Industrial Average rose 0.5%
• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro was little changed at $1.0898
• The British pound fell 0.2% to $1.2968
• The Japanese yen was little changed at 157.92 per dollar

Cryptocurrencies

• Bitcoin rose 5.5% to $63,424.23
• Ether rose 6.5% to $3,410.42

Bonds

• The yield on 10-year Treasuries advanced four basis points to 4.23%
• Germany’s 10-year yield declined two basis points to 2.47%
• Britain’s 10-year yield was little changed at 4.10%

Commodities

• West Texas Intermediate crude fell 0.3% to $81.97 a barrel
• Spot gold rose 0.4% to $2,421.87 an ounce

This story was produced with the assistance of Bloomberg Automation.

©2024 Bloomberg L.P.