In a shocking turn of events, former U.S. President Donald Trump narrowly survived an assassination attempt while speaking at a campaign rally in Butler, Pennsylvania on July 13, 2024.
Intricacies of Trump Assassination Attempt
The gunman opened fire, grazing Trump's right ear before being shot dead by Secret Service agents. Trump, with blood streaking his face, was swiftly escorted off stage but defiantly raised his fist to the crowd.
The suspect was identified as 20-year-old Thomas Matthew Crooks. While registered as a Republican, Crooks had also donated to a Democratic-aligned PAC, leaving his motives unclear. The FBI believes he acted alone and has not linked him to any particular ideology.
The gunman opened fire, grazing Trump's right ear before being shot dead by Secret Service agents. Trump, with blood streaking his face, was swiftly escorted off stage but defiantly raised his fist to the crowd.
The suspect was identified as 20-year-old Thomas Matthew Crooks. While registered as a Republican, Crooks had also donated to a Democratic-aligned PAC, leaving his motives unclear. The FBI believes he acted alone and has not linked him to any particular ideology.
One bystander, former fire chief Corey Comperatore, was killed in the attack, and two others are in critical condition. Both President Biden and Trump called for unity and condemned political violence in the wake of the shooting. The incident, the first wounding of a current or former president since the 1981 Reagan assassination attempt, has dramatically reshaped the 2024 presidential race.
Short-Term Market Reaction and Safe Haven Demand
News of the Trump assassination attempt sparked short-term shifts in financial markets as investors weighed the implications. Typical safe-haven assets like gold and U.S. Treasuries saw increased demand in a flight to safety. However, analysts expect this haven-seeking trend to be fleeting, in line with market reactions to previous political shocks.
Bitcoin and other cryptocurrencies rallied on the news, with Bitcoin rising nearly 4% to trade above $60,000. The jump was attributed to speculation that the pro-crypto Trump would gain voter sympathy and see his election odds improve. Other assets that could benefit from Trump's policies, like fossil fuel and defense stocks, also attracted interest.
Debate over Trump's Election Prospects and Policy Impacts
Beyond the short-term haven demand, investors are assessing how the assassination attempt may impact the presidential race and, in turn, shape economic policy and specific market sectors.
Prediction markets showed a bump in bets on a Trump victory following the shooting, though the shift was comparable to that seen after Biden's weak debate performance in late June. Some argue that a Trump win would boost stocks overall due to deregulation and corporate tax cut prospects. Small-caps and cyclical sectors could be particular beneficiaries under this scenario.
However, others warn that Trump's trade hawkishness and unorthodox style could rattle markets. Sectors reliant on global supply chains, like tech, could suffer from tariffs and protectionist measures. Emerging markets with U.S. export exposure may also be vulnerable. Additionally, Trump's fossil fuel focus could threaten up to $1 trillion in clean energy investment.
Bond markets are showing signs of increased sensitivity to U.S. political risk, which could dampen the typical flight-to-safety Treasury demand stemming from domestic turmoil. Longer-term yields have started to move in tandem with rising political uncertainty.
Looking Ahead | Republican Convention and Economic Data
With the Republican National Convention kicking off this week, Trump is slated to name his running mate and rally the party behind his candidacy. Meanwhile, a packed calendar of earnings reports and economic data will provide concrete direction for markets. Results from Netflix, Taiwan Semiconductor, ASML, and Goldman Sachs may drive sector-specific moves in tech, semiconductors, and financials.
With the economy still on shaky ground, any political upheaval has the potential to exacerbate market volatility in the months ahead.
