Former US President Donald Trump survived an assassination attempt over the weekend, adding further tension to the sharply divided political climate in America just four months ahead of the November presidential election.
Trump, 78, was holding a campaign rally in Butler, Pennsylvania, on Saturday when he was reportedly shot in the ear by a 20-year-old man carrying an AR-15-style rifle, who managed to get close enough to shoot at him from a nearby rooftop.
The former president’s campaign team said he was doing well after the incident, and had only suffered the injury to his upper right ear. He is now thought to be headed to the Republican National Convention, which kicks off on Monday, where he is expected to be formally nominated as the party’s presidential candidate for the election on November 5.
Reuters reported that FBI officials said on Sunday the shooter acted alone, although it had yet to identify an ideology linked to the suspect — Thomas Matthew Crooks of Bethel Park, Pennsylvania — or any indications of mental health issues.
“There is no place in America for this kind of violence,” US President Joe Biden said at the White House.
“I urge everyone, everyone please don’t make assumptions about his motive or affiliations.”
But as markets wake to a new week, the full economic impact of the attack is likely still to play out.
Many US investors had already been betting on the continued momentum of “Trump trade” — the anticipation that a second Trump administration would bring tax cuts, higher tariffs, and looser regulations. That momentum had been gaining ground since Biden’s performance in last month’s debate.
It is now expected to take a deeper hold, with Trump galvanising his supporters and drawing sympathy with his defiance in the moments shortly after being shot.
The US dollar, which would gain if relaxed fiscal policy kept bond yields high, started moving higher compared to its Asian peers in early trading. Bitcoin, meanwhile, rose above US$60,000 ($88,660), potentially reflecting Trump’s pro-crypto stance.
“For us, the news does reinforce that Trump’s the frontrunner,” Mark McCormick, global head of foreign-exchange and emerging-market strategy at Toronto Dominion Bank, tells Bloomberg.
“We remain US dollar bulls for the second half and early 2025.”
One caveat to the “Trump trade” speculation is that the emergence of political violence may heighten concern about US instability and push investors into haven assets, such as gold, potentially winding back some of the market trends already in place.
According to a recent Reuters/Ipsos survey in May, two in three Americans say they are worried that violence could follow the coming election.
“Political risk is binary and hard to hedge, and uncertainty was high as it is with the close nature of the race,” Priya Misra, a portfolio manager at JPMorgan Investment Management, also tells Bloomberg.
“This adds to volatility. I think it further increases the chance of a Republican sweep,” she says, adding that “could put steepening pressure on the curve.”
While traders generally don’t expect Trump’s assassination attempt to derail stock market trajectories in the long-term, a rise in near-term price swings is perhaps likely. Markets had already been wrestling with the idea that valuations have become too stretched, particularly given the boom in artificial intelligence stocks and the risks presented by high interest rates.
“The shooting further complicates the election outlook for Democrats, already divided over Biden’s future as a candidate,” Tina Fordham, geopolitical strategist and founder of London-based Fordham Global Insight, tells Reuters.
“US political violence is sadly a feature and not a bug. The question now is how a nation, in which a significant proportion of citizens believe civil war is increasingly likely, will respond. We don’t expect there to be an initial reaction in financial markets. If anything, the near-term implication will be the acceleration of the consensus view in markets of a Trump victory.”
Write to Oliver Gray at Mining.com.au
Images: Anna Moneymaker/Getty Images
