The impact of the attempted shooting of former President Donald Trump last week was felt not just in the polls and the media but in the stock market, as well.
After Trump was shot at a rally in Pennsylvania, pollsters and media outlets predicted that the failed assassination would be a benefit to the Republicans during the upcoming election. Investors, predicting that another Trump presidency would be friendlier to business and likely come with deeper cost cuts, reacted accordingly. On Monday, the Dow jumped 210 points by the end of the day while shares of several publicly traded companies in the healthcare, financial services and consumer goods sectors also rose.
“Markets rose after the failed Trump shooting because many believed this failed attempt would increase the likelihood that voters would gather behind Trump and further galvanize his base,” said Adam Koprucki, founder of the investing website Real World Investor with experience at J.P. Morgan and Citibank.
According to Koprucki, the perceived business-friendliness of an incoming Republican administration is putting big businesses, particularly those that are subject to potential regulation, at ease. Trump has made his intentions to free American companies from “burdensome regulations” clear.
“Trump has historically supported tax cuts and increased government spending to stimulate economic growth,” Koprucki said. “This more relaxed fiscal approach can enhance consumer spending, particularly on discretionary items like luxury and fashion items, and boost business investment, fueling economic expansion.”
But other analysts said that Trump’s leading position in the polls after the shooting poses a potential benefit to luxury brands and some associated risks, as well. Markus Kraus, affiliate manager for Europe at Trive Financial Services, a global investment and finance company, said Trump’s business-friendly policies may be offset by his unpredictable stance on trade and imports.
“For luxury brands, it’s complex,” Kraus said. “If consumer confidence rises, luxury goods could benefit. But Trump’s proposed 10% import tariff could hurt European luxury brands in the U.S.”
Kraus said market volatility could increase if a Trump presidency comes to pass. Trump’s unpredictable style of governance, frequent policy changes and emphasis on higher tariffs but lower taxes led to higher inflation during his previous administration and would likely continue.
According to the Associated Press, inflation in the U.S. under Trump topped at an annual rate of 2.4%, below the peak of 8% in 2022 under Biden and the current rate of 3.4%. But the pandemic had an impact on inflation during Trump’s presidency and his term began with inflation already at a historic low. Without those two factors, his policies would likely lead to more inflation in a future term. The industry is already dealing with the effects of higher inflation, so further inflation could have a negative impact on fashion.
Investors’ reactions to Trump’s protectionist policies can be seen by comparing the U.S. stock market’s performance in the days following the shooting to Europe’s. While American stocks were up, European stocks were down by 1% at the end of trading on Monday.
“If these policies take effect, they will likely drive [national] inflation higher under a Trump presidency,” said Koprucki.
