MSCI’s gauge of stocks across the globe added 0.18 points, or 0.02%, to 828.73
World stock indexes and Treasury yields gained on Monday as investors weighed the prospect of Republican Donald Trump winning the U.S. presidential race after he survived an assassination attempt, while the dollar dropped after comments from Fed Chair Jerome Powell.
Longer-dated U.S. bond yields jumped on the assumption that Trump policies would add to government debt and inflation, while crypto stocks soared along with bitcoin. Trump has presented himself as a champion of crypto currency.
Investors have viewed a Trump win as likely to mean more tax cuts and a looser regulatory environment. The S&P 500 energy sector added 1.6%.
On online betting website PredictIt, contracts for a Trump election victory traded at 68 cents, up from 60 cents on Friday, with a potential payout of $1. Contracts for a Biden victory were at 26 cents.
The publicity around the event is providing some kind of a boost, according to Josh Wein, portfolio manager at Hennessy Funds.
But, he said, the last four, five days the stock market has been rallying, so it is a continuation of a strong move from the back half of last week since we realised that maybe there is some reason to celebrate the idea that there could be one and now likely two rate cuts by the end of the year.
Investors digested comments from Powell, who said on Monday the three U.S. inflation readings over the second quarter of this year do “add somewhat to confidence” that the pace of price increases is returning to the Fed’s target in a sustainable fashion.
Traders are also pricing in a second and possible third rate cut by December.
While all three major U.S. stock indexes closed well below session highs, the Dow Jones Industrial Average hit an all-time closing high.
The DJIA added 210.82 points, or 0.53%, to 40,211.72, the S&P 500 advanced 15.87 points, or 0.28%, to 5,631.22 and the Nasdaq Composite rose 74.12 points, or 0.40%, to 18,472.57.
Shares of Goldman Sachs rose 2.6% after the company reported quarterly results. More results for the second-quarter U.S. earnings season are expected this week.
MSCI’s gauge of stocks across the globe added 0.18 points, or 0.02%, to 828.73. The STOXX 600 index declined 1.02%.
