Stock markets globally displayed robust growth on Monday following President Joe Biden’s announcement of his withdrawal from the 2024 presidential campaign and his endorsement of Vice President Kamala Harris as the Democratic nominee.
In the United States, the Dow Jones Industrial Average saw an increase of 128 points (0.3%), the S&P 500 surged by 1.1%, and the Nasdaq went up by 1.6%. European markets also experienced gains, whereas most Asian markets closed lower. US Treasuries registered a minor uptick, leading to a decline in yields, and the dollar weakened against major currencies.
Technology shares witnessed a significant recovery, with Nvidia climbing 4.8% and Advanced Micro Devices advancing by 2.8%. Conversely, CrowdStrike, which encountered a widespread tech disruption last week, witnessed a 13.5% decrease in its shares, eroding 27% of its value since Thursday.
Prior to Biden’s declaration, apprehensions had arisen concerning his competition against former President Donald Trump. Investors started allocating funds in stocks that could profit from Trump’s policies while divesting in those associated with clean energy, apprehensive of a potential resurgence of Trump. Consequently, US Treasury prices declined, and yields increased due to concerns over inflation.
By throwing his support behind Harris, Biden has united the Democratic party in her favor, thereby reducing certain uncertainties within the market. Jay Hatfield, Chief Executive Officer at Infrastructure Capital Advisors, remarked, “Biden’s endorsement of Kamala Harris diminishes uncertainties,” envisioning a more tranquil market reaction.
The preceding week posed challenges for the markets, with the S&P 500 enduring its most challenging three-day performance in 2024 and Europe’s STOXX 600 encountering its most trying week since October. Analysts warn that market volatility may persist as the electoral race approaches.
Despite recent hurdles, the markets exhibit resilience. The S&P 500 has recorded gains in 28 of the past 38 weeks, a performance not observed since 1989.
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