US stock futures are trending upward on Monday, showing signs of recovery after President Joe Biden announced his decision not to seek re-election. The S&P 500 and Nasdaq 100 futures saw gains of approximately 0.5% and 0.8%, respectively, indicating a bounce back from last week’s worst losses since April. The Dow Jones Industrial Average futures also saw a slight increase following a sharp decline.
With the announcement of Kamala Harris as Biden’s chosen successor, investors are bracing for increased volatility in the stock market. This development could potentially overshadow the upcoming flood of earnings reports and key inflation data scheduled for this week.
The exit of Biden from the race is perceived on Wall Street as diminishing the chances of a second term for Republican candidate Donald Trump. This shift in the political landscape may prompt a reevaluation of “Trump trade” investments, such as bitcoin, bank stocks, and US bond yields. The yield on the 10-year Treasury slipped in early Monday trading.
While the focus remains on the political developments, the earnings season is set to ramp up, with several S&P 500 companies, including Alphabet, Tesla, and Chipotle, expected to report this week. Verizon is leading the quarterly results with an early announcement on Monday.
These earnings reports will provide valuable insight into the state of the economy and consumer sentiment ahead of the release of second-quarter GDP data on Thursday and the update on the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, on Friday.
As the market anticipates further shifts in response to the evolving political landscape, investors are urged to stay informed and adapt their investment strategies accordingly. Stay connected with Extreme Investor Network for real-time updates and expert analysis to navigate the dynamic and ever-changing financial markets.