US stocks rise as tech leads gains after Biden exits presidential race

US Stocks Rally as Tech Leads Following Biden’s Exit from Presidential Race

In a surprising turn of events, US stocks rallied on Monday, with tech stocks leading the gains as investors digested the news of President Joe Biden’s decision to exit the presidential race. The S&P 500 and Nasdaq Composite both saw significant gains, bouncing back from their worst weekly losses since April.

The S&P 500 gained 0.7%, while the tech-heavy Nasdaq Composite rose roughly 1%. The Dow Jones Industrial Average erased earlier gains but remained near the flatline. Chip heavyweight Nvidia led a broad-based tech rebound after experiencing heavy losses last week as investors shifted away from big-cap names.

Biden’s unexpected move to back his vice president, Kamala Harris, as the Democratic nominee has sent shockwaves through the political and financial landscape. This unexpected development has raised concerns about potential market volatility and its impact on already battered stock prices.

The exit of Biden is seen as weakening the odds of a second term for Republican contender Donald Trump, prompting a light unwinding of recent “Trump trade” bets on assets like bitcoin, bank stocks, and higher US bond yields. The yield on the 10-year Treasury slipped in early hours on Monday.

Investors are now shifting their focus to the upcoming earnings season, with a slew of S&P 500 companies set to report their quarterly results. This week’s earnings reports will provide valuable insights into the economy and consumer sentiment, especially ahead of key economic data releases on second-quarter GDP and the Federal Reserve’s preferred inflation metric, the PCE index.

As the political landscape continues to evolve, investors will be closely monitoring the potential impact on market trends and asset prices. Stay tuned for more updates as the situation develops.