Global markets showed strong growth on Monday as President Joe Biden revealed his decision to withdraw from the 2024 presidential race and endorse Vice President Kamala Harris as the Democratic candidate.
In the US, the Dow Jones Industrial Average went up by 128 points (0.3%), the S&P 500 rose by 1.1%, and the Nasdaq increased by 1.6%. European markets also saw gains, while Asian markets mostly ended lower. US Treasuries slightly rose, causing yields to drop, and the dollar lost value against major currencies.
Tech stocks had a notable rebound, with Nvidia rising by 4.8% and Advanced Micro Devices by 2.8%. On the other hand, CrowdStrike, which faced a global tech outage last week, saw its shares drop by 13.5%, losing 27% of its value since Thursday.
Prior to Biden’s announcement, concerns arose about his competition against former President Donald Trump. Investors began to invest in stocks that could benefit from Trump’s policies while selling those linked to green energy, fearing a potential return of Trump. This resulted in a decrease in US Treasury prices and a rise in yields due to inflation concerns.
By endorsing Harris, Biden has unified the Democratic party behind her, reducing some uncertainties in the market. Jay Hatfield, CEO at Infrastructure Capital Advisors, stated, “The endorsement of Kamala Harris by Biden reduces uncertainty,” anticipating a calmer market response.
The previous week proved challenging for the markets, with the S&P 500 facing its worst three-day performance in 2024, and Europe’s STOXX 600 encountering its toughest week since October. Analysts caution that market instability could persist as the election draws closer.
Despite recent obstacles, the markets remain resilient. The S&P 500 has shown gains in 28 out of the last 38 weeks, a performance not witnessed since 1989.
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