Stock Market Today: Dow futures trade near record while gold rally continues
A number of things have helped drive stocks higher recently, from the Federal Reserve’s jumbo interest-rate cut to a stronger-than-expected start to earnings season.
But there’s one factor that has perhaps been underappreciated: increasing odds that former President Donald Trump will retake the White House in the Nov. 5 election.
That’s according to Brian Allen, chief investment officer at Pennsylvania-based investment-management firm CS McKee.
“There seems to be increasing evidence day by day that the market believes a Trump victory is more likely,” he said. Allen rattled off a number of indicators, including climbing prices of bitcoin, a bounce for the U.S. dollar, and a rally in regional-bank stocks.
Recent polls have shown that Trump appears to be closing the gap with Vice President Kamala Harris in several key swing states, he noted.
And of course, shares of Truth Social parent Trump Media & Technology Group, better known by its ticker DJT, which has seen its price rise nearly 150% over the past three weeks.
One reason investors expect stocks might perform better under Trump, in particular if Trump retakes the White House while Republicans retake Congress, comes down to taxes. Quite simply, Trump has said he would extend his 2017 tax cuts while further rolling back the corporate tax rate.
Some economists, however, have warned that Trump’s tariff policies will be a potential headwind for markets and the economy.
History shows that stocks have tended to climb regardless of which party is in control in Washington, although data from CFRA’s Sam Stovall has shown that the market’s best performance has, on average, coincided with periods where Democrats controlled the White House, but lacked unilateral control of Congress.