US stock markets opened higher on Monday, July 22, 2024, following President Joe Biden’s unexpected withdrawal from the 2024 presidential race and his endorsement of Vice President Kamala Harris as the Democratic nominee. This political shift has caused a reversal of the recent ‘Trump trade,’ with technology stocks leading the gains.The S&P 500 futures rose 0.6%, the Nasdaq 100 futures surged 1.1%, and the Dow Jones futures increased by 0.2%, signaling a potential recovery from last week’s losses. The technology sector, particularly megacap stocks, showed significant strength, with companies like Alphabet, Microsoft, Apple, and Tesla advancing 1% to 4.2%.Investors are now reassessing their political bets while also focusing on upcoming earnings reports and key economic data releases. The market is awaiting reports on second-quarter GDP and the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditure (PCE) index, both due later this week.The dollar index fell 0.16% to 104.22, indicating a weakening of the US currency’s global purchasing power. US Treasury yields also fell, suggesting investors may be moving away from previous ‘Trump trade’ bets.Despite the overall positive sentiment, some individual stocks faced challenges. Verizon shares fell 4.0% after reporting a decline in quarterly earnings, although the company added more wireless subscribers than expected in the second quarter.The market’s reaction to Biden’s withdrawal and Harris’s endorsement has been generally positive, with online betting site PredictIt showing a 4-cent drop in bets on a Trump victory to 60 cents, while bets on a Harris victory rose 12 cents to 39 cents. However, analysts caution that uncertainty remains until the new Democratic candidate is confirmed, which could lead to heightened volatility in the coming weeks.
Key points
- US stock markets opened higher following Biden’s withdrawal from the 2024 presidential race and endorsement of Kamala Harris.
- Technology stocks, particularly megacaps, led the market gains, reversing the recent ‘Trump trade’.
- Investors are focusing on upcoming earnings reports and key economic data releases, including second-quarter GDP and PCE index.
- The dollar weakened and US Treasury yields fell, indicating a shift in investor sentiment.
Contradictions👾While most sources report a positive market reaction to Biden’s withdrawal, some analysts caution about potential uncertainty and volatility until the new Democratic candidate is confirmed.
