Trump Shooting Boosts Dollar, Hits Treasuries and Euro Futures

Markets reacted to the attempted assassination of former President Donald Trump with a rise in the US dollar and bitcoin, and a sell-off in longer-term US Treasuries. EUROSTOXX 50 futures dropped 0.5% ahead of eurozone industrial production data, while Fed Chair Jerome Powell's speech later today could influence September rate cut bets. Earnings results are expected from BlackRock and Goldman Sachs after strong investment banking revenues reported by Citigroup and JPMorgan.

Equities

The FTSE 100 closed 0.4% higher on Friday , hitting a one-week high, buoyed by optimism over a potential rate cut by the US Federal Reserve in September. The FTSE 250 also saw a slight increase of 0.1%, closing at 21,202.89 after reaching a two-year high the previous day.

In the UK, the banking sector showed a modest gain of 0.1%. However, precious metal miners declined by 1.7%, affected by falling gold prices. Utility stocks fell the most on the FTSE 100, down 1.3%, after significant gains in the previous session.

Across the Atlantic, Wall Street closed higher, with the S&P 500 rising 0.55% to 5,615.35 points and the Dow Jones increasing 0.62% to 40,000.90 points. The Nasdaq also gained 0.63%, closing at 18,398.45 points. The S&P 500 and Dow hit intraday record highs amid bets on a Fed rate cut.

In the US, several major banks reported mixed quarterly results. JPMorgan Chase saw a 1.2% drop in its stock despite a rise in investment banking fees. Wells Fargo fell 6% after missing quarterly interest income estimates, while Citigroup’s stock declined 1.8% despite strong investment banking revenue. The S&P 500 banks index fell 1.5%.

Tesla was the most traded stock in the S&P 500, with $38 billion worth of shares exchanged. The electric car maker's stock jumped 3%. Apple and Nvidia both climbed over 1%, rebounding from previous losses. Analysts predict strong profit growth for S&P 500 companies in the second quarter, particularly in the technology sector.

Forex & Commodities

US Treasuries fell while the dollar strengthened following an attack on US presidential candidate Donald Trump, which increased his election chances and added political uncertainty to markets. The dollar edged up 0.3% against the yen to 157.96, while the euro slightly eased to $1.0893. Bitcoin, benefiting from prospects of lighter regulation under Trump, rose 4% to a two-week high.

In the bond market, futures for 10-year US Treasuries slipped, pushing 10-year yields up by 4.8 basis points to 4.2353% in early London trading. Asian stock markets saw thin trading due to a holiday in Japan. S&P 500 and Nasdaq futures were marginally higher, whereas European futures fell, with FTSE futures down 0.3%.

China's economic data missed expectations, with second-quarter growth at 4.7%, below the forecast of 5.1%. Retail sales growth hit an 18-month low, and new home prices dropped at their fastest pace in nine years. The yuan weakened to 7.2608 per dollar, and mainland Chinese stocks, along with Hong Kong’s Hang Seng index, declined by 1%.

Federal Reserve Chair Jerome Powell is set to speak later on Monday, with markets anticipating a potential rate cut in September. The European Central Bank is expected to hold rates at 3.75% during its Thursday meeting, with a possible cut in September.

Gold prices remained stable at $2,408 an ounce, just below last week’s peak. Oil prices saw minor fluctuations; Brent crude was at $85.10 a barrel, and US crude at $82.36 a barrel, supported by political uncertainties in the US and the Middle East, but pressured by weak demand from China.