How have markets reacted to the Trump assassination attempt?

The assassination attempt on US President and 2024 presidential candidate Donald Trump put the financial markets to a difficult test as a new week of trading began.

The markets showed slight confusion at the beginning of trading on Monday, but risk appetite quickly took control of the price movement in the markets and a wave of optimism began to dominate investor sentiment.

Continuous gains

The shooting of the former US president did not cause investors to flee to safe haven assets such as the US dollar and US Treasury bonds. Instead, investors focused on what was behind the incident and what it might mean for the Republican presidential candidate’s election campaign.

Once the focus was on Trump’s chances of winning over US President Joe Biden, positivity began to penetrate the markets, which was evident in the performance of US stock futures at the opening of the first trading day this week, which, despite not achieving a noticeable rise, was able to avoid a decline.

Thus, it was confirmed that the incident did not have a very strong impact on the markets on the first day of trading following the attack on Trump during an election conference in Pennsylvania.

It is likely that the tragic impact that was expected to fall on the markets was greatly reduced because the Republican candidate survived the assassination attempt and appeared heroic immediately after the shooting, which may increase his popularity among voters.

This was not the first time that Trump achieved political gains without making any significant effort by either himself or his campaign, as if these gains were gifts descending on him from the sky.

The attempted assassination of Trump and the positive impact it had that may serve his campaign reminds us of the benefits achieved for the Republican candidate after the poor performance of US President Joe Biden during the television debate that took place between the competitors for the presidential seat.

Standard & Poor’s 500

The horrific incident revealed the strong positive relationship between the Standard & Poor’s 500 index and Trump’s chances of winning the US presidency, a relationship that began to grow stronger since last March, according to several market analysts and poll analysts for the 2024 US elections. Before last March, the relationship was positive. These are among the stocks and the chances of Biden winning the election are very strong.

Another evidence that the positive relationship is getting stronger between US stock indices and Trump’s chances of winning is that there is a positive relationship between the Standard & Poor’s 500 and Bitcoin, which led to the rise of the index and Bitcoin after the attack.

Bitcoin rose by about 5.25%, which confirms that investors in global financial markets in general – and digital currency markets in particular – favor Trump’s victory in the 2024 US presidential elections.

US Dollar

The US dollar was unable to determine a clear direction since the beginning of the new week’s trading on Monday, continuing the series of being negatively affected by the latest batch of US inflation data, which shed light on a significant decline in price growth in the United States.

US inflation fell on Thursday to levels below market expectations, according to data issued by the US Bureau of Labor Census. The decline in inflation favors expectations of a rate cut, especially after Federal Reserve Chairman Jerome Powell’s testimony on economic conditions before the US Congress.

The US consumer price index fell last June by -0.1% compared to the reading recorded the previous month at 0.0%, according to the monthly reading, which fell below market expectations, which indicated 0.1%.

The annual reading of the US Consumer Price Index also recorded an increase of 3.00% last June, compared to the reading of the same month last year, which recorded 3.3%. The actual reading for last month was lower than market expectations, which indicated 3.1%.

Excluding food and energy prices, the index recorded an increase of 0.1% last month compared to the reading recorded the previous month at 0.2%, indicating levels lower than market expectations, which indicated 0.2%.

The annual reading of the index rose to 3.3% last June compared to the reading of the same month last year, which recorded 3.4%, which highlights the decline more than expected to the same level recorded in the previous reading, according to data issued last Friday.

The dollar index, which measures the performance of the US currency against a basket of major currencies, saw no change at all on Monday compared to the close recorded last Friday at 104.09 points. The index fell to the lowest levels throughout the current trading day at 104.03 points, compared to the highest levels, which recorded 104.32 points. But after investors began to value Trump’s victory in the US presidential elections and favor his chances of victory compared to Biden, the US dollar began to abandon its strong connection to inflation data and began to benefit from the effects left by the attempt to assassinate the Republican candidate.