US Election Concerns Impact Treasury Market: Market Update

Money | July 1, 2024, 12:34 p.m.

The aftermath of the November US election debate between Joe Biden and Donald Trump caused fluctuations in the bond market, with longer-term maturities performing poorly. Traders also observed stock market gains, particularly in tech megacaps, as the dollar saw a slight increase. Concerns over the growing fiscal deficit arose after the debate, leading to uncertainties about the US political landscape. The divided US Supreme Court ruling in favor of Trump's immunity from criminal charges regarding the election results further added to the market's uncertainty. Meanwhile, market strategists at Morgan Stanley are re-evaluating their assumptions post-debate, anticipating changes in immigration and tariff policies that may impact economic growth. The dollar is expected to remain strong in the second half of the year due to various factors, including the Treasury yield advantage and election risks. Overall, investors are advised to stay selective and focus on quality US stocks amid the evolving market dynamics.