US tech stocks ripped higher on Monday as investors assessed the political landscape following President Joe Biden’s exit from the presidential race and braced for the start of megacap tech earnings.
The S&P 500 (^GSPC) gained more than 1% while the tech-heavy Nasdaq Composite (^IXIC) rose roughly 1.6%, both coming off their worst weekly losses since April. The Dow Jones Industrial Average (^DJI) increased 0.3%.
Chip heavyweight Nvidia (NVDA) led the broad-based tech rebound following heavy losses last week as investors rotated out of big cap names.
The moves Monday came after a huge shakeup in the race for president in the US. Democratic leaders continued to rally around Vice President Kamala Harris in the wake of Biden’s exit, with former House Speaker Nancy Pelosi the latest big name to endorse Harris as the party’s presidential nominee.
Still, the political shock could inject more volatility into an already battered stock market, distracting focus from this week’s flood of earnings and key inflation release.
That could prompt a light unwinding of recent “Trump trade” bets on assets seen as benefiting from a second Trump presidency, such as bitcoin, bank stocks, and higher US bond yields. The yield on the benchmark 10-year Treasury (^TNX) slipped on Monday.
Meanwhile, a stream of S&P 500 companies are expected to report this week including tech giant Alphabet (GOOGL, GOOG), EV maker Tesla (TSLA), and fast foods chain Chipotle (CMG).
Those results will give insight into the economy and the consumer ahead of Thursday’s report on second quarter GDP and Friday’s update on the Federal Reserve’s preferred inflation metric, the Personal Consumption Expenditures (PCE) index.
