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Stock index futures rose on Monday, led by the Nasdaq, after U.S. President Joe Biden dropped out of the presidential race.
S&P 500 Index Futures (SPX) +0.7%Nasdaq 100 Futures (US100:IND) +1.1% and Dow futures (India) +0.2%.
10-year Treasury yield (US10Y) fell 3 basis points Pointing to 4.22%. 2-year return rate (US2Y) was unchanged at 4.52%.
The market is experiencing its worst week since mid-April, and the rotation in tech stocks triggered by last Thursday’s consumer inflation report has continued over the past few days.
“Looking back at last week, it was an incredibly eventful week for markets, with all sorts of ups and downs,” said Deutsche Bank’s Jim Reed.
Politics was once again in the spotlight Sunday afternoon when Biden dropped out of the race and endorsed Vice President Kamal Harris for the Democratic nomination.
Reed added that so far it’s hard to say how much the market has reacted to the news.
TS Lombard wrote in a new research note: “Markets are already prepared for a Trump victory and a possible Republican sweep. Once a Democratic president and vice president are elected, campaigned and influenced in the polls, markets will will react.
“If policy odds change, markets will react. So what matters is who the Democrats choose as their candidate,” said Paul Donovan of UBS.
Traders are also keeping a close eye on China’s surprise rate cut.
The People’s Bank of China lowered the 7-day reverse repurchase rate from 1.8% to 1.7%, the 1-year loan preferential rate from 3.45% to 3.35%, and the 5-year interest rate from 3.95% to 3.85%.
The Chicago Fed’s national activity rose slightly less than expected in June.
