Crypto stocks, prison operators and other shares that could benefit from a Donald Trump presidency jumped on Monday as an assassination attempt on the Republican candidate boosted odds of his victory in the U.S. elections.
Investors said trades betting on Trump's victory will increase this week after he was shot in the ear during the rally in Pennsylvania. The former U.S. president pumped his fist moments after the attack and his campaign said he was fine.
Online betting site PredictIt showed bets of an election win for Trump at 67 cents, up from Friday's 60 cents, with Joe Biden at 27 cents.
Shares of Trump Media & Technology Group (TMTG) (DJT.O) soared 33%. Trump owns a majority stake in the company, worth about $3.8 billion as of June 25 according to LSEG data, and it is the parent of social media platform Truth Social.
"The caveat is that it's nearly four months to go (until voting day) and things can change, but today the markets are betting on Trump being the victor," said Ben Laidler, head of equity strategy at Bradesco BBI, adding that TMTG "is the tip of the spear and the most sensitive to a Trump victory."
TMTG stock has surged 75% this year, driven by retail traders betting on a Trump win at the Nov. 5 rematch against Democratic candidate and U.S. President Joe Biden.
Crypto stocks also got a boost, tracking bitcoin's jump to a two-week high, as Trump has presented himself as a champion of cryptocurrency. Crypto exchange Coinbase Global (COIN.O), bitcoin miners Riot Platforms Inc (RIOT.O) and Marathon Digital (MARA.O) added between 5% and 8.5%.
The long-dated U.S. bond yields rose, in part on the assumption Trump's policies would add to inflation and debt, while the benchmark S&P 500 (.SPX) edged 0.5% higher, nearing another record high.
"Most investors are not changing their overall commitment to U.S. equities. After all, the broad stock market rose under the last Trump administration and has risen under the Biden administration as well," said Rick Meckler, partner at Cherry Lane Investments.
Gun makers and ammunition stocks Smith & Wesson Brands (SWBI.O), Sturm Ruger & Company (RGR.N) and Ammo (POWW.O) jumped between 7.5% and 18%. Gun stocks tend to rise after a mass shooting as calls for gun control in the past have led some people to buy more firearms out of fear that their availability would be limited.
Prison stocks Geo Group (GEO.N) and CoreCivic (CXW.N) also rose 10% and 7.7%, respectively. Both are potential beneficiaries of a Trump presidency as he has promised to crack down on illegal immigration, which could boost demand for detention centers.
Software developer Phunware (PHUN.O), hired by Trump's 2020 presidential re-election campaign to build a phone app, jumped 8%, while video-sharing platform Rumble (RUM.O), popular with conservatives, added 8.6%.
On the downside, clean energy stocks slipped as Trump has said he would reverse many of the Biden administration's signature climate policies, including tax incentives, if he wins the election.
Invesco Solar ETF (TAN.P) fell 5.6% and iShares Global Clean Energy ETF (ICLN.O) fell 3.7%.
U.S.-listed Chinese firms (MCHI.O) dropped on the prospects a second Trump presidency fueling trade tensions between Beijing and the United States.
U.S. voters view Trump as the better candidate for the economy, according to Reuters/Ipsos polls, even as Biden's White House seeks to benefit from a solid economy with inflation slowing and low unemployment.
"In the absence of any real policy proclamations from Trump, traders are finding themselves having to speculate" on Trump 2024 trade, said Mark Malek, chief investment officer of Siebert Financial Corp.
"A second Trump presidency would mean expansionary economic stimulus in general, lower income taxes, less regulation, and increased tariffs."
