The recent debate between former President Donald Trump and Vice President Kamala Harris has sent shockwaves through the investment world, prompting a flurry of market movements. The event, which took place on Tuesday, has shifted the odds in betting markets towards Harris, triggering a noticeable change in investment sentiment.
One of the most dramatic consequences was a downturn in the shares of Trump Media & Technology Group (DJT), a company popular with retail traders and closely linked to Trump’s political fortunes. Conversely, solar stocks, seen as potential beneficiaries of a Harris presidency, experienced a surge in pre-market trading, rising between 2.2% and 7.2%.
The debate initially caused the U.S. dollar to dip against Asian currencies, although it later rebounded after the release of U.S. consumer price data. U.S. cryptocurrency shares and Bitcoin also took a hit in pre-market trading, while the U.S. dollar fell by 0.2% against a basket of currencies. Stock futures also declined by around 0.3%, according to Reuters.
While the debate generated intense exchanges between Trump and Harris, investors were left with little new information on key market-influencing issues like tariffs, taxes, and regulation. However, online prediction markets signaled a stronger likelihood of a Harris victory in the upcoming November elections. Alvin Tan, head of Asia FX strategy at RBC Capital Markets in Singapore, noted a “general view that Harris won the debate.” “It’s obviously not a slam dunk for Harris, but the chances of a Trump victory have slipped a bit,” he added.
Charu Chanana, Head of FX Strategy and Global Market Strategist at Saxo, highlighted the debate’s potential to provide a decisive edge in a close race, possibly affecting crypto and energy stocks as market sentiment adjusts to the shifting political dynamics.
The debate’s outcome has significant implications for the markets. A flash poll revealed that 63% of registered voters who watched the debate chose Harris as the winner. Before the debate, Wall Street was already experiencing a downturn, with stocks trading in the red as investors awaited the presidential face-off. The energy and financial sectors were particularly hard-hit, significantly underperforming the rest of the market.
The debate’s impact on the market demonstrates the tight connection between politics and investment sentiment. With the election approaching, investors are closely watching developments and adjusting their portfolios accordingly. The next few months will likely see continued volatility as markets react to campaign events, polls, and other political developments.
