Market Surge: Stocks and Dollar Climb on Trump Assassination Survival and Rate Cut Hopes

U.S. stock index futures climbed on Monday following increased odds of Donald Trump's reelection after an assassination attempt. The financial markets reacted positively with gains in stocks, cryptocurrency, and higher Treasury yields amid increased anticipation of an interest rate cut by the Federal Reserve.

U.S. stock index futures surged on Monday, buoyed by increased chances of presidential candidate Donald Trump winning a second term after surviving an assassination attempt. The market also benefitted from persistent hopes for an interest rate cut.

Trump was shot in the ear during a rally in Pennsylvania on Saturday, in what authorities consider an assassination attempt. Despite his face being spattered with blood, Trump remained resilient, pumping his fist moments after the incident. His campaign confirmed his well-being. PredictIT, an online betting site, showed Republican election odds rising from 60 to 67 cents, while Democrats' odds fell to 37 cents.

The dollar gained against major currencies, and Treasury yields inched higher. Under Trump's potential second term, markets anticipate hawkish trade policies and looser regulations on issues from climate change to cryptocurrency. "Trump as President is likely a positive for risk ... we should see S&P500 futures and the USD push higher today," said Chris Weston, head of research at Pepperstone.

Shares of companies linked to Trump soared in premarket trading. Trump Media & Technology Group led actively traded stocks with a 63.5% gain, software firm Phunware surged 49.4%, and video-sharing platform Rumble rose 16.7%.

In the cryptocurrency space, bitcoin jumped 8% to a two-week high, with Coinbase Global up 5.7% and miners Marathon Digital Holdings and Riot Platforms both rising over 6%. Stocks anticipated to benefit from a Trump second term also climbed, with gunmaker Smith & Wesson up 2.5% and prison operator GEO Group surging 7.0%.

The market rally followed a strong finish on Friday when Wall Street's main indexes closed higher, and both the Dow Jones Industrial Average and the S&P 500 hit intraday record highs. Traders increased their bets on a September rate cut by the Federal Reserve, fueled by unexpected cooler inflation data.

Corporate earnings season continues this week, with Goldman Sachs and BlackRock due to release their results before the market opens. Federal Reserve Chairman Jerome Powell and San Francisco Fed President Mary Daly are also expected to make comments on Monday that may offer further insights into their economic assessments.

As of 5:13 a.m. ET, Dow e-minis were up 211 points, or 0.52%, S&P 500 e-minis had risen 24.5 points, or 0.43%, and Nasdaq 100 e-minis were up 102.25 points, or 0.5%.

(With inputs from agencies.)