Shares of cryptocurrency, arms companies and companies that could benefit from a Donald Trump presidency surged after an assassination attempt on the Republican candidate, boosting expectations that he will win the November election.
Trump’s survival after being shot in the ear increased his lead over President Joe Biden.
Trump shares rise
Shares of Trump Media and Technology Group, in which Trump is the majority owner, rose 31.37% at the end of trading yesterday, raising its market value to about $7.7 billion, despite its revenues being similar to those of two branches of the famous American coffee company Starbucks.
Trump Media and Technology Group is the parent company of the social media platform Truth Social, and its shares have risen 129% in 2024 as retail traders bet on Trump winning another term.
“There are about four months left (until the election) and things could change, but today the markets are betting on Trump being the winner,” said Ben Laidler, head of equity strategy at Bradesco BPI.
He added that the Trump Media Group is the most sensitive indicator of Trump’s victory, according to Reuters.
Tesla stock rebounds
Shares of electric carmaker Tesla rose 1.78% at the end of trading yesterday after the company’s billionaire CEO, Elon Musk, supported the former Republican president following the shooting incident.
The Wall Street Journal quoted him as saying that he intends to allocate about $45 million per month to the new super political action committee supporting the candidate Trump.
Cryptocurrency companies jump
Cryptocurrency companies rose, tracking bitcoin’s 6.4% gain in 24 hours after hitting a two-week high, as Trump presented himself as a champion of the cryptocurrency.
Cryptocurrency exchange Coinbase Global, bitcoin mining firm Riot Platforms, and Marathon Digital all jumped more than 10% each.
Long-term U.S. bond yields rose on expectations that Trump’s policies will lead to higher government debt and stoke inflation, while the S&P 500 rose 0.28%, approaching another record high.
“Most investors are not changing their overall commitment to U.S. stocks,” said Rick Meckler, partner at Sherry Lane Investments. “After all, the broad stock market rose under the last Trump administration and is rising under the Biden administration as well.”
Weapons and prison management benefit
Shares of gun and ammunition makers Smith & Wesson Brands, Sturm Ruger & Company and AMO jumped between 7% and 15%.
Gun stocks have been rising after mass shootings, civil unrest and fears of state control over guns prompted people to buy more guns out of fear that their availability would become limited.
Shares of private prison operators Geo Group and CoreCivic rose more than 8%, both potential beneficiaries of Trump’s presidency, as he has promised to crack down on illegal immigration, which could boost demand for detention centers.
Shares of software developer Phunware, which was hired by Trump’s 2020 re-election campaign to create a phone app, rose 0.94%, while shares of video-sharing platform Rumble, popular with conservatives, rose 20.71%.
Tax incentives
Clean energy stocks fell as Trump said he would reverse many of the Biden administration’s signature climate policies, including tax incentives, if he wins the election.
The Invesco Solar ETF fell 5.87%, and the iShares Global Clean Energy ETF fell 3.9%.
In the same context, the iShares MSCI China ETF fell by 2.11%, as investors believe that a second Trump presidency could inflame trade tensions between Beijing and the United States.
American voters see Trump as the best candidate for the economy, according to Reuters/Ipsos polls, even as the Biden White House seeks to capitalize on a strong economy with slowing inflation and low unemployment.
“Without any real policy statements from Trump, traders are forced to speculate,” said Mark Malek, chief investment officer at Siebert Financial Corp. “A second Trump presidency would mean broadly expansionary economic stimulus, lower income taxes, less regulation and higher tariffs.”
