Following the highly-anticipated debate between US Republican Donald Trump and Democratic Vice President Kamala Harris, investors are making significant shifts in their positioning. Trump Media & Technology Group, the company behind Truth Social, saw its shares drop by 13 percent, while so-called “Trump trades” like Bitcoin and crypto stocks retreated. On the other hand, solar stocks, which are expected to benefit from a Harris win, rallied.
During the combative debate, Trump and Harris clashed on various issues, but provided few new details that could impact markets. However, online prediction markets showed increased betting odds in favor of Harris winning in November. According to Alvin Tan of RBC Capital Markets, there is a general view that Harris won the debate, leading to a slight decrease in the chances of a Trump victory.
While the presidential race remains a key concern for investors, they are also closely monitoring immediate market catalysts such as worries about a softening US economy and uncertainty over interest rate cuts by the Federal Reserve. The S&P 500 experienced its worst weekly loss since March 2023 last week, amid concerns about the economy.
The debate impact was felt across various sectors, with stocks of Trump Media & Technology Group plummeting while solar companies’ shares rose. Harris’s plans to raise corporate taxes and lower drug prices could have a significant impact on the healthcare and tech sectors.
The debate highlighted the differing policies of the candidates, with Trump focusing on tax cuts and tariffs, while Harris aims to raise corporate taxes and provide tax benefits to families and small businesses. Analysts believe a Harris presidency could support Treasury prices and boost large-cap growth and tech stocks, while a Trump presidency could benefit small-cap stocks and cyclical companies. Investors are closely watching the political dynamics as the race remains close in battleground states.
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