Police cars outside the residence of Thomas Matthew Crooks, the alleged shooter at a Trump rally on Saturday, investigate the area in Pennsylvania. In the aftermath of the incident, one rally attendee was killed, two rally attendees are in critical condition and Donald Trump suffered a non-fatal gunshot wound. The shooter is dead after being killed by the United States Secret Service. (Photo by Kyle Mazza/Anadolu via Getty Images)
Investors will initially favour traditional haven assets and perhaps lean into trades most linked to former President Donald Trump’s chances of winning the White House after he survived an assassination attempt, according to market watchers.
“Undoubtedly there’ll be some protectionist or haven flows in the Asia early morning,” said Nick Twidale, chief market analyst at ATFX Global Markets. “I’d suspect gold could test all-time highs, we will see the yen getting bought and the dollar, and flows into Treasuries too.”
Market Sentiment and Reactions
Initial market commentary suggested the shooting of Trump at a Saturday rally in Pennsylvania may also prompt traders to boost his probability of success in November’s election. His support for looser fiscal policy and higher tariffs are generally viewed as likely to benefit the dollar and weaken Treasuries.
One early weekend indicator of market sentiment: Bitcoin rose above $60,000, probably reflecting Trump’s pro-crypto stance.
Assets Linked to Trump Trade
Other assets positively linked to the so-called Trump trade include the shares of energy firms, private prisons, credit-card companies, and health insurance firms.
Expected Market Volatility
Traders will also closely watch market measures of expected volatility on Monday, such as those on the tariff-sensitive Chinese yuan and Mexican peso, which had begun to price in the US vote.
Insight on Potential Market Reactions
Strategists had already expected a volatile run into the election, not least because Democrats are still agonizing over President Joe Biden’s candidacy after his poor debate performance last month raised questions about his age. Investors had been also grappling with the possibility that the election may end in a protracted dispute or political violence.
When President Ronald Reagan was shot four decades ago, the stock market dipped before closing early. The next day, March 31, 1981, the S&P 500 rose over 1% and benchmark 10-year Treasury yields fell 9 basis points to 13.13%, according to data compiled by Bloomberg.
Bond investors should pay particular attention as the attack is likely to boost Trump’s election chances, and ultimately lead to worries about the fiscal outlook.
Market Reactions and Client Flows
Kyle Rodda, senior financial market analyst at Capital.com, said he was seeing client flows into Bitcoin and gold after the shooting. He mentioned that this event signifies a turning point in American political norms, which could affect market movements towards havens.
