Monday observed a notable upsurge in international markets after President Joe Biden made a surprising choice not to participate in the 2024 presidential race and instead endorse Vice President Kamala Harris as the Democratic candidate.
The US stock market indicators reacted positively, with the Dow Jones Industrial Average rising by 128 points (0.3%), the S&P 500 surging by 1.1%, and the Nasdaq increasing by 1.6%. On the other hand, European markets experienced favorable movements, whereas a majority of Asian markets displayed a pessimistic trend. US Treasuries saw a slight rise, leading to diminished yields and a devaluation of the dollar against major currencies.
The technology sector witnessed notable rebounds, with Nvidia marking a 4.8% surge and Advanced Micro Devices registering a 2.8% increase. In contrast, CrowdStrike, still coping with a recent global tech disruption, observed a significant decrease of 13.5% in its shares, losing 27% of its value since the previous Thursday.
Before Biden’s unexpected announcement, concerns surrounding a potential competition between him and former President Donald Trump had prompted stock investors to shift towards assets likely to benefit from Trump’s policies, while swiftly divesting from green energy-related stocks due to uncertainties regarding a potential Trump comeback. This shift led to a decline in US Treasury prices and an increase in yields due to inflation concerns.
By endorsing Harris, Biden managed to unify support within the Democratic party around her, thereby reducing uncertainties in the financial markets. Jay Hatfield, CEO of Infrastructure Capital Advisors, commented, “Biden’s endorsement of Kamala Harris diminishes uncertainties,” envisioning a more stable market environment.
The preceding week posed challenges for the markets, as evidenced by the S&P 500 witnessing its toughest three-day performance in 2024, and Europe’s STOXX 600 enduring its most challenging week since October. Analysts have cautioned that market volatilities may persist as the election date approaches.
Despite recent obstacles, the markets have shown resilience, with the S&P 500 charting gains in 28 out of the past 38 weeks, a milestone not seen since 1989.
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