NEW YORK, Sept 11 (Askume) – Investors switched sides on Wednesday after a heated debate between Republican Donald Trump and Democratic Vice President Kamala Harris , with betting markets tilting toward Harris following the incident.
Shares of Trump Media & Technology Group, the company that owns Truth Social, fell 13% Wednesday afternoon, while other so-called Trump trades such as bitcoin and crypto stocks retreated. Solar stocks rose, benefiting from Harris’ win, while health care stocks fell.
In a heated debate late Tuesday night , Trump and Harris clashed on every issue from the economy to immigration as both sidesAn attempt is being made to divert the campaign in a hotly contested election .
His exchange provided investors with few new details on issues that could affect the market, including tariffs, taxes and regulations. But online prediction markets suggest Harris’s chances of winning in November are high: PredictIt’s 2024 presidential election marketplace raised Harris’ odds to 55 cents from 53 cents before the debate, while Trump’s odds fell to 47 cents from 52 cents.
“The consensus is that Harris won the debate,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets in Singapore. “It’s obviously not a huge win for Harris, but Trump’s chances of winning have diminished a little bit.”
While the presidential race remains a focus for investors, political concerns have recently been overshadowed by more immediate market catalysts , including worries about potential weakness in the U.S. economy and uncertainty about whether the Federal Reserve will raise interest rates. After a second consecutive disappointing jobs report, the S&P 500 posted its worst weekly percentage loss since March 2023 last week, though the index is still up nearly 15% this year.
Still, some investors believe even a small shift in a candidate’s perception could play a key role in a race that could involve hundreds of thousands of votes in some states. According to an average of polls compiled by The New York Times, the two candidates are roughly tied in the seven battleground states that will decide the election.
“The US presidential debate has achieved its goal, with one candidate taking a decisive lead in a highly contested race,” said Charu Chanana, head of FX strategy and global market strategist at Saxo Bank, as sentiments adjust to changing political dynamics.
Trump has described himself as a pro-cryptocurrency candidate.
While it’s difficult to separate election-driven moves in the dollar , interest rates and stocks from broader economic activity in the wake of Wednesday’s highly-anticipated U.S. consumer price report , investors have pointed to several corners of the market where the debate is having an impact.
InvestorThere was a big buying spree of shares in Trump Media Technology Group (DJT.O) , a company popular among retail traders sensitive to the former president’s chances of winning the 2024 election. Following the IPO, shares fell 18% to a new low of $15.30. Bitcoin was little changed after falling about 4% on the day, while shares of several cryptocurrency-focused companies also declined, including crypto miner Riot Platform (RIOT.O) .
Shares of correctional facility operators, including GEO Group (GEO.N) and CoreCivic (CXWN.N) , which could benefit from tighter immigration policies, also fell .
Meanwhile, Harris’s win sent shares of publicly traded U.S. solar companies sharply higher. The Invesco Solar ETF (TAN.P), which was down about 25% this year, rose 5% on Wednesday.
Shares of health insurers including Humana (HUM.N) and CVS Health (CVS.N) also fell on Wednesday . Some analysts believe Harris’ efforts to lower drug prices could hurt the industry.
Taxes
Trump has promised to reduce corporate taxes and take a tough stance on trade and tariffs. He has also said a strong dollar would hurt the United States, although some analysts believe his policies could lead to inflation and eventually a collapse of the currency.
Harris last month outlined a plan to raise the corporate tax rate from 21% to 28%, a proposal that some on Wall Street believe could hurt corporate profits .
Steve Chiavarone, senior portfolio manager at Federated Hermes, said Harris’ presidency could reduce the likelihood of a wider budget deficit due to increased spending, which could support Treasury prices, boost large-cap stocks and also boost technology stocks.
He said U.S.-focused policies such as tax cuts and tariffs from the Trump presidency could boost small-cap and cyclical companies while hurting bonds.
On Tuesday night, Harris attacked Trump’s intention to impose high tariffs on foreign goods — a proposal she said was equivalent to a sales tax on the middle class — while also touting her plan to provide tax breaks for families and small businesses.
The Chinese yuan, which has come under pressure due to the US-China trade war during Trump’s tenure, strengthened against the dollar on Wednesday.
Trump criticized Harris for maintaining inflation during her tenure in the Biden administration.
However, economic policy is likely to remain uncertain for some time.
“There hasn’t been much substantive discussion about policy. The economic policies that the two candidates advocate are ultimately very different,” said Sonu Varghese, global macro strategist at Carson Group. “The economic policy implemented next year will depend on the composition of the Senate and the House of Representatives.”
