US stocks rose on Monday with tech leading the gains as investors assessed the potential fallout from President Joe Biden’s exit from the presidential race.
The S&P 500 (^GSPC) gained 0.7% while the tech-heavy Nasdaq Composite (^IXIC) rose roughly 1%, both coming off their worst weekly losses since April. The Dow Jones Industrial Average (^DJI) erased earlier gains to hover near the flatline.
Chip heavyweight Nvidia (NVDA) led a broad-based tech rebound on Monday following heavy losses last week as investors rotated out of big cap names.
Investors are surveying a changed political landscape after Biden called off his reelection bid on Sunday and backed his vice president, Kamala Harris, to replace him as the Democratic nominee. The political shock could inject more volatility into an already battered stock market, distracting focus from this week’s flood of earnings and key inflation release.
Biden’s move, while not unexpected after weeks of pressure, is seen on Wall Street as eroding the odds of Republican contender Donald Trump securing a return to the White House. That could prompt a light unwinding of recent “Trump trade” bets on assets seen as benefiting from a second Trump presidency, such as bitcoin, bank stocks, and higher US bond yields. The yield on the benchmark 10-year Treasury (^TNX) slipped in Monday’s early hours.
Meanwhile, earnings season is about to kick into higher gear, with a stream of S&P 500 companies expected to report in a week headlined by Alphabet (GOOGL, GOOG), Tesla (TSLA), and Chipotle (CMG).
Those results will give insight into the economy and the consumer ahead of Thursday’s report on second quarter GDP and Friday’s update on the Federal Reserve’s preferred inflation metric, the Personal Consumption Expenditures (PCE) index.
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Tech regains lead as Nvidia, Tesla, Alphabet stocks rise
Tech stocks regained the market lead on Monday after last week’s heavy sell-off of big-cap names in the Nasdaq (^IXIC) and S&P 500 (^GSPC).
The S&P 500 Technology ETF (XLK) gained more than 2%, reversing a recent rotation out of the sector.
Chip heavyweight Nvidia (NVDA) gained more than 4%, while EV giant Tesla (TSLA) rose more than 3%.
Social media platform Meta (META) also gained more than 2%. Tech giant Alphabet (GOOGL, GOOG) spiked more than 2%. Both Alphabet and Tesla are expected to report quarterly results on Tuesday after the market close.
Tech retakes market lead on Monday as stocks Nvidia, Tesla and Meta rise. -
