In a surprising turn of events, former U.S. President Donald Trump’s prospects of winning the upcoming presidential election have skyrocketed, with his chances of reelection now standing at nearly 75%. The dramatic incident that unfolded during a rally in Butler, Pennsylvania on July 13th, 2024, where Trump was shot in the ear, has had far-reaching implications on market reactions, public sentiment, and the race between Trump and incumbent President Joe Biden.
The Rally Incident:
During the rally, chaos erupted as gunfire rang out, leaving Trump injured. Despite the severity of the attack, Trump demonstrated defiance, with blood spatters on his face, as he raised his fist to the crowd. Secret Service agents acted swiftly, ensuring his safety and confirming later that he had escaped major harm.
Market Reactions and Investor Sentiment:
Financial markets saw an immediate response following the rally incident. Prior to the shooting, market sentiment had favored a potential Trump presidency, evident in the strength of the dollar and expectations for a steeper U.S. Treasury yield curve. Portfolio manager, Rong Ren Goh, predicts that these market trades will gain further momentum in the coming week. Additionally, betting markets experienced a significant increase in the implied probability of Trump winning the US 2024 Presidential Election.
Historical Context and Poll Impact:
The shooting incident marks the first time a U.S. president or a major party candidate has been targeted since the assassination attempt on President Ronald Reagan in 1981. Drawing historical parallels, Reagan’s approval ratings surged by 22 points after his shooting. Chief Investment Officer at Vantage Point Asset Management, Nick Ferres, suggests that this incident could similarly reshape the competitive landscape between Trump and Biden, potentially resulting in a landslide victory for Trump.
Political and Public Reactions:
Leaders from around the world and U.S. politicians have universally condemned the shooting. Notably, high-profile figures like Tesla CEO Elon Musk have publicly expressed their support for Trump. Musk’s endorsement, combined with Trump’s resilient response to the attack, has bolstered his image among voters. Images of a bloodied Trump defiantly pumping his fist are expected to invigorate his supporters and potentially boost his election chances.
Challenges for Biden:
President Biden has been facing mounting scrutiny following a lackluster performance in a recent debate against Trump. Concerns from donors, supporters, and fellow Democrats about his ability to effectively compete have grown. This latest incident adds to the challenges Biden faces as he strives to reassure his base and swing voters.
Key Issues for Voters:
Immigration and the economy remain core concerns for U.S. voters. Recent Reuters/Ipsos polls indicate that Trump is perceived as the stronger candidate regarding economic matters, despite Biden’s administration highlighting solid economic performance with slowing inflation and low unemployment rates.
The shooting incident during Trump’s rally has had a profound impact on the political landscape, with his reelection odds increasing substantially. As the race continues, the focus will remain on Biden’s ability to address concerns and regain momentum. With key voter issues like immigration and the economy in play, the upcoming election promises to be an intense battle between two highly controversial candidates.