“US stocks surge as Trump’s election odds improve, Dow Jones hits record close. Fed Chair Powell’s comments boost investor confidence.”
The US stock market experienced a significant surge on Monday, with the Dow Jones Industrial Average (DJIA) reaching a record close of 40,211.72, a 0.5% increase from the previous day. This marks the index’s 20th record close this year and its first since May 17. The S&P 500 and Nasdaq Composite also saw gains, rising 0.3% and 0.4%, respectively.
The market’s upward trend is attributed to several factors, including Federal Reserve Chairman Jerome Powell’s optimistic remarks on recent inflation data and the increasing likelihood of a Donald Trump victory in the upcoming presidential election. Powell’s comments reinforced expectations of a September rate cut, which boosted investor confidence.
The DJIA’s record close is also partly attributed to Trump’s improving election odds, which have been reflected in prediction polls following an unsuccessful assassination attempt on Saturday. While it is challenging to quantify the exact impact of this event on the market, investors may be reacting positively to Trump’s perceived pro-business stance, including his promise of tax cuts for the wealthy.
However, some experts remain skeptical about the influence of presidential candidates on the stock market. Peter Boockvar, Chief Investment Officer at Bleakley Financial Group, noted that stock market moves are often more random than what a president can dictate.
Despite the current market gains, it is important to recognize that any policies implemented by the next president will take time to affect the real economy. Investors should remain focused on market fundamentals and current government policies, rather than relying solely on election speculation.
The US stock market has experienced significant growth in 2024, with the S&P 500 and Nasdaq Composite advancing 18.2% and 23.1%, respectively, year-to-date. Growth stocks, particularly those in the technology and semiconductor sectors, have led the market higher.
As the Republican National Convention unfolds, investors can expect more election-related volatility in the market. However, with the Fed’s reassurance and improving economic data, the US stock market is poised for continued growth in the coming months.