Credit: Envato Elements
Global markets saw solid gains on Monday after President Joe Biden announced he is dropping out of the 2024 presidential election and endorsing Vice President Kamala Harris as the Democratic nominee.
In the US, the Dow Jones Industrial Average rose by 128 points (0.3%), the S&P 500 increased by 1.1%, and the Nasdaq gained 1.6%. European markets also went up, while Asian markets mostly closed lower. US Treasuries rose slightly, reducing yields, and the dollar weakened against major currencies.
Tech stocks rebounded significantly, with Nvidia up 4.8% and Advanced Micro Devices up 2.8%. However, shares of CrowdStrike, which experienced a global tech outage last week, dropped by 13.5%, losing 27% of its value since Thursday.
Before Biden’s announcement, there was concern about his chances against former President Donald Trump. Investors had started buying stocks that might benefit from Trump’s policies and selling those related to green energy, fearing Trump’s return. This led to US Treasury prices falling and yields rising due to inflation worries.
With Biden endorsing Harris, the Democratic party is now rallying around her, reducing some uncertainty in the market. “The fact that Biden endorsed Kamala Harris reduces uncertainty,” said Jay Hatfield, CEO at Infrastructure Capital Advisors. He expects a calmer market reaction.
Last week was tough for markets, with the S&P 500 experiencing its worst three-day performance of 2024, and Europe’s STOXX 600 seeing its worst week since October. Analysts warn that market volatility might continue as the election nears.
Despite the recent challenges, markets remain strong. The S&P 500 has been up in 28 of the last 38 weeks, a performance not seen since 1989.
