Stock Market Update: Dow Jones Surges
Shares of small-cap companies and bank stocks increased on Monday, as investors bet that the failed assassination attempt against former President Donald Trump would boost his chances in the upcoming presidential elections in November.
The potential for more favorable fiscal policies in the future is seen as an additional stimulus for the bull market, which began to take shape last week. Stocks of small-cap companies and banks have seen a significant rise in value.
Market Capitalization and Bank Stocks Rise
On Monday, market capitalization and bank stocks increased.
Stock Market Performance
The Dow rose by 210.82 points, or 0.53%, to 40,211.72 points. The broad stock measure S&P 500 added 0.28% to 5,631.22 points. Both indexes reached new highs during the session, with the first also setting a record closing level. The tech-heavy Nasdaq Composite increased by 0.4% to 18,472.57 points.
Expert Commentary
“The good news is that former President Trump did not sustain serious injuries,” commented Sam Stovall, Chief Investment Strategist at CFRA Research, to CNBC. “As a result, I believe the market will continue to rise.”
Republican National Convention kicks off in Milwaukee
In Milwaukee, Wisconsin, the National Convention of the Republican Party started on Monday, with Trump leading President Joe Biden in national polls.
Health insurance stocks rise during trading session
Shares of Humana and UnitedHealth Group increased during today’s trading session. Insurers will benefit from the weaker pressure on expenses from a potential Republican administration.
Russell 2000 index reaches highest level since 2022
The small-cap companies’ index, Russell 2000, rose by 1.8%, reaching its highest level since 2022 and marking the fourth consecutive quarterly gain.
Goldman Sachs Predicts Positive Impact on Small Cap Stocks in Trump’s Second Term
According to Goldman Sachs, the second term of President Trump could boost the stocks of companies with small market capitalization, citing their strong performance after his victory in 2016.
The stocks of Goldman Sachs rose by 2.6% after their revenues exceeded analysts’ expectations. Both the SPDR S&P Bank ETF and SPDR S&P Regional Banking ETF also saw gains of over 2%. Goldman is one of the over 40 companies in the S&P 500 index reporting their second-quarter results this week, alongside Bank of America, United Airlines, and Netflix.
Aside from the earnings reports, investors are also analyzing the potential impact of Trump’s second term on various sectors of the economy.
The Federal Reserve Chairman’s Statement on Interest Rates
The chairman of the Federal Reserve, Jerome Powell, recently stated that the central bank will not wait for inflation to reach the target level of 2% before lowering interest rates. He also mentioned that the scenario of a hard landing is unlikely for the economy.
“We are very close to the moment when the Fed will see the data it needs to see in order to agree to lower rates,” commented Bill Merz, head of the Capital Markets Analysis department at U.S. Bank Asset Management. “This is the first and most important thing in market psychology.”
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