S&P 500 Hits Fresh Highs as Long-term Bonds Fall

Stock markets reached new peaks as concerns over increased volatility did not materialize following a high-profile incident involving Donald Trump, which in turn boosted his presidential campaign prospects.

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All major stock indexes saw gains, with the S&P 500 hitting its 38th record high this year. Trump Media & Technology Group Corp. experienced a significant surge of 35%. The candidate’s improved chances of winning the election positively impacted various sectors including oil producers, firearm manufacturers, private prison operators, and health insurance companies. Trump's favorable stance on cryptocurrencies caused a rise in Bitcoin and related industries. Tesla Inc. shares climbed as Elon Musk voiced support for Trump, while solar energy companies saw a decline due to perceptions that Democrats are more supportive of renewable energy initiatives.

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The yield on 30-year Treasury bonds surpassed the two-year yield for the first time since January, fueled by expectations that Trump would implement a more aggressive fiscal policy if elected in November. The dollar remained relatively stable.

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John Stoltzfus of Oppenheimer Asset Management commented, "While the attempt on former President Trump’s life was shocking, we believe markets will quickly assimilate this news without significant disruption. Historically, such events do not deter investors, who tend to stay focused on economic and earnings data."

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The S&P 500 climbed to approximately 5,640 points. A measure of the “Magnificent Seven” large-cap stocks increased by nearly 2%. Apple Inc. saw gains after being identified as a top recommendation by Morgan Stanley. The Russell 2000 index, which tracks smaller companies, rose by 1.5%. Goldman Sachs Group Inc. experienced volatility with a surge in profits and plans to slow down share buybacks. Macy’s Inc. fell sharply after ending merger discussions.

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With minimal economic data on the agenda, traders are expected to closely monitor comments from Federal Reserve officials, particularly a speech by Jerome Powell on Monday, following his recent testimony before Congress.

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PredictIt data indicated that Trump’s odds of securing a second term improved following the incident at a rally in Pennsylvania on Saturday.

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The Republican National Convention in Milwaukee, taking place from Monday to Thursday, symbolizes Trump’s solidification of his control over the Republican Party. Viewers are eagerly awaiting the announcement of his vice-presidential pick, a closely guarded secret he has hinted at for weeks, adding to the event's suspense.

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Jay Woods of Freedom Capital Markets suggested, “We might see a brief market rally, a ‘Trump bump’ if you will, and could also experience some volatility as political rhetoric intensifies leading up to the Republican Convention.”

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