Investors bet that the unsuccessful assassination attempt on...

Investors bet that the unsuccessful assassination attempt on former President Donald Trump would be a tailwind for the Republican presidential candidate and his party in November’s election. A victory for the GOP at the polls could pave the way for favorable tax and fiscal policies for investors.

The market also continued its rotation into small-cap stocks, with the $Russell 2000 Index (.RUT.US)$ rising 1.8% during Monday’s session. Tom Lee, the head of research at Fundstrat Global Advisors, thinks that last week’s big gains for the small-cap index marks just the beginning of a longer rotation. The Russell 2000 posted a 6% gain last week.

“That rally that started last week for small caps is going to be larger than the October to December rally of last year that was over eight weeks and almost a 30% gain for the Russell 2000,” he said.

Lee said that small-cap stocks look comparatively more oversold, with valuations even lower this time around.

“We think that this move could be something like 10 weeks and as much as 40%,” he added, noting that the monthly decline in June’s consumer price index reading is giving small-cap stocks “the green light” to rally.

Bank of America, Morgan Stanley, UnitedHealth and Charles Schwab are set to report earnings Tuesday before the bell. Traders will also watch for the latest economic data, which includes June’s retail sales, export and import price indexes and May’s business inventories.