Investors bet on GOP gains and friendlier fiscal policies, boosting the Dow Jones and small-cap shares
The Dow Jones Industrial Average advanced on Monday.
Investors bet that the unsuccessful assassination attempt on former President Donald Trump will boost his prospects as a Republican presidential candidate, according to CNBC.
Investors anticipate friendlier fiscal policies, which could further bolster the emerging bull market that began last week. Small-cap shares and banks climbed on Monday.
The blue-chip Dow jumped 210.82 points, or 0.53 percent, to 40,211.72. The S&P 500 added 0.28 percent to 5,631.22. Both indices touched new intraday highs, with the Dow also achieving a record close. The Nasdaq Composite rose 0.4 percent to 18,472.57.
“The good news is that former President Trump was not injured more than the ear, that he was not killed,” said Sam Stovall, chief investment strategist at CFRA Research, on CNBC’s “Worldwide Exchange.” “As a result, I think the market will continue on its momentum ways.”
The Republican National Convention commenced Monday in Milwaukee, Wisconsin, with Trump leading President Joe Biden in national polls.
Humana and UnitedHealth Group each rose during the session, as the insurers could benefit from fewer cost pressures under a Republican administration.
The Russell 2000 gained 1.8 percent, reaching its highest level since 2022 and recording a fourth consecutive positive day. Goldman Sachs suggested a second Trump term could help small caps outperform, citing their strong performance following his 2016 victory.
Goldman Sachs shares added 2.6 percent after posting earnings that exceeded analysts’ expectations. The SPDR S&P Bank ETF (KBE) and SPDR S&P Regional Banking ETF (KRE) both gained more than 2 percent.
Goldman is among more than 40 S&P 500 companies reporting second-quarter earnings this week, including household names such as Bank of America, United Airlines, and Netflix.
Beyond earnings, investors analyzed comments from Federal Reserve Chair Jerome Powell, who stated the central bank wouldn’t wait until inflation reached its 2 percent goal before lowering interest rates. He also mentioned that a hard landing scenario for the economy was unlikely.
“We are getting very close to the point of the Fed … seeing the data that they need to see to be comfortable cutting rates,” said Bill Merz, head of capital market research at US Bank Asset Management. “That’s what is the first and foremost thing in the psyche of the market.”
