Stock futures are rising in premarket trading Monday, offering the first glimpse of the markets’ reaction to President Joe Biden’s decision not to seek reelection and endorsement of Vice President Kamala Harris to become the Democratic presidential candidate.
It comes at the start of a busy week for earnings that will also include a first look at second-quarter gross domestic product and the Federal Reserve’s preferred measure of inflation for June.
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U.S. stock futures were rising Monday after President Joe Biden dropped out of the race for his reelection and endorsed Vice President Kamala Harris.
Futures for the Dow Jones Industrial Average added 76 points, or 0.2%. Contracts tied to the S&P 500 gained 0.5%, and those for the technology-heavy Nasdaq rose 0.9%. All three indexes fell on Friday.
While Biden’s decision wasn’t completely unexpected, it does change the outlook slightly as markets had been pricing in a likely Trump victory. Other factors for investors to consider are the outlook for interest rates, the recent slump in big-name tech stocks, and a bunch of earnings reports out this week from the likes of Google-parent Alphabet, Coca-Cola, and AT&T.
“President Biden dropping out of the race adds to uncertainty for stocks,” said David Bahnsen, chief investment officer at The Bahnsen Group. Adding: “The election is not in the top 3 priorities in terms of market considerations, as earnings, Federal Reserve, and geopolitics are a bigger driver.”
Bond yields were slightly higher than at the start of Friday. The rate on the benchmark 10-year U.S. Treasury bond was at 4.216% early Monday. The yield on the 2-year note was at 4.515.
