U.S. stock index futures rose in evening deals on Sunday after President Joe Biden abruptly withdrew his bid for reelection and endorsed Vice President Kamala Harris as the Democratic nominee against Republican frontrunner Donald Trump.
S&P 500 Futures rose 0.3% to 5,572.50 points, while Nasdaq 100 Futures rose 0.6% to 19,832.50 points by 19:29 ET (23:29 GMT). Dow Jones Futures rose 0.2% to 40,640.0 points.
Futures rose with Wall Street indexes nursing bruising losses last week, as growing expectations of interest rate cuts saw investors rotate out of heavyweight technology stocks and into more economically sensitive sectors.
Focus this week is on key second-quarter earnings from the tech sector, which are expected to offer more cues on the main drivers of a technology rally this year, specifically artificial intelligence.
The so-called “Trump Trade” was also in play, as investors positioned for more protectionist policies and trade tariffs in the event of a Trump presidency.
Biden pulls out of race, Harris seen as Dem. nominee
Biden’s withdrawal comes amid growing calls from members and donors of his party for him to step down, amid concerns over his mental health and that he may not be able to effectively run against Trump.
Biden said he will focus on serving his full term until January 2025.
But while the 46th president endorsed Harris as his successor, she still needs to be officially nominated by the Democratic party with a vote due in August. Trump was nominated as the Republican presidential candidate last week.
CBS polling data from last week showed Trump polling better than Biden, especially in the wake of a failed assassination attempt on the former president. It also showed Trump had a slight edge over Harris.
“Trump’s stated policies include broad-based import tariffs, immigration limits and a pullback from treaty commitments. As Trump’s polling results have lifted, markets have favoured trades anticipate(ing) more trade barriers and possibly higher inflation,” ANZ analysts wrote in a note.
“Some polls have Harris performing better than Biden against Trump, and the Democrats will be hoping the next polls feature a Harris-driven bump.”
Expectations of a Trump presidency also drove a rotation into stocks more likely to benefit from tighter U.S. trade policies and friendlier business conditions within the country. This mass rotation out of technology sparked deep losses on Wall Street.
The S&P 500 fell 0.7% to 5,505.0 points on Friday, while the NASDAQ Composite slid 0.8% to 17,726.94 points. The Dow Jones Industrial Average fell 0.9% to 40,646.0 points.
Alphabet, Tesla earnings on tap
The second-quarter earnings season is set to continue this week, with key earnings from Alphabet Inc (NASDAQ: GOOG) and Tesla Inc (NASDAQ: TSLA) due on Tuesday.
The focus will be squarely on how the two plan to further incorporate artificial intelligence into their products, while Tesla will also be watched as it grapples with slowing sales.
Earnings from other majors, including Lockheed Martin Corporation (NYSE: LMT), General Electric Company (NYSE: GE), Texas Instruments Incorporated (NASDAQ: TXN) and Visa Inc Class A (NYSE: V) are also on tap in the coming days.
