Nasdaq leads stocks higher after Biden withdraws

by

U.S. stocks rose Monday, with technology leading the way as investors weighed the potential fallout from President Joe Biden’s exit from the presidential race.

The S&P 500 (^GSPC) gained 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) rose about 1%, both following their worst weekly losses since April. The Dow Jones Industrial Average (^DJI) erased earlier gains and hovered near the flatline.

Chip giant Nvidia (NVDA) led a broad-based recovery in the tech sector on Monday after heavy losses last week as investors pulled out of big names.

Investors are surveying a changed political landscape after Biden on Sunday canceled his re-election bid and endorsed Vice President Kamala Harris to replace him as the Democratic nominee. The political shock could add more volatility to an already battered stock market, distracting from this week’s flood of earnings and key inflation data.

Biden’s move, while not unexpected after weeks of pressure, is being seen on Wall Street as a way to reduce the chances of Republican nominee Donald Trump returning to the White House. It could lead to a slight unwinding of recent “Trump trade” bets on assets that stand to benefit from a second Trump presidency, such as bitcoin, bank stocks and higher U.S. bond yields. The yield on the benchmark 10-year Treasury note (^TNX) fell in the early hours of Monday.

Meanwhile, earnings season is ramping up, with a slew of S&P 500 companies expected to report earnings this week, led by Alphabet (GOOGL, GOOG), Tesla (TSLA) and Chipotle (CMG).

The results provide insight into the economy and consumers ahead of the second-quarter GDP report due Thursday and Friday’s update on the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) index.

Live9 updates

  • One concern in the business world that Kamala Harris is already focused on: AI

    Yahoo Finance’s Ben Werschkul reports:

    It is not yet known exactly what economic policies the Biden/Harris administration will focus on if Kamala Harris becomes the Democratic nominee or wins in November.

    But there is one concern in the business world that clearly interests her: artificial intelligence.

    The current vice president has been called Joe Biden’s “AI czar,” central to the White House’s approach to an issue that is likely to be of major concern to the next president — whether a Democrat like Harris or a Republican like Donald Trump.

    When Biden signed a sweeping AI executive order last October, Vice President Harris helped shape the approach and was onstage watching. The order kicked off a governmentwide effort to use Washington’s powers to try to ensure that AI systems are safe for years to come.

    Harris’ technology track record will be closely watched in the coming days as the vice president has quickly emerged as the favorite to become the Democratic presidential nominee after Biden ended his campaign on Sunday afternoon.

    Read more here:

  • Crypto Gains Political Prominence as Donald Trump Courts Bitcoin Enthusiasts

    Yahoo Finance’s David Hollerith reports:

    Crypto is once again gaining political traction as former President Donald Trump prepares to speak at a bitcoin conference in Nashville this week.

    The price of bitcoin (BTC-USD) has risen by more than 13% over the past month, climbing above $68,000 in the last 24 hours, bringing the world’s largest cryptocurrency very close to the record high set earlier this year.

    This week, crypto investors are expecting several reasons to get even more excited, including the Securities and Exchange Commission’s approval for major Wall Street asset managers to issue exchange-traded funds holding ether (ETH-USD), the world’s second-largest cryptocurrency.

    Read more here:

  • Tech regains lead as shares of Nvidia, Tesla and Alphabet rise

    Technology stocks reclaimed market leaders on Monday after last week’s heavy sell-off in big names in the Nasdaq (^IXIC) and S&P 500 (^GSPC).

    The S&P 500 Technology ETF (XLK) rose more than 2%, reversing a recent rotation out of the sector.

    Chip giant Nvidia (NVDA) rose more than 4%, while EV giant Tesla (TSLA) rose more than 3%.

    Social media platform Meta (META) also rose more than 2%. Tech giant Alphabet (GOOGL, GOOG) rose more than 2%. Both Alphabet and Tesla are expected to report quarterly results after the market closes on Tuesday.

    Technology reclaims the market lead on Monday as shares of Nvidia, Tesla and Meta rise. Technology reclaims the market lead on Monday as shares of Nvidia, Tesla and Meta rise.

    Technology reclaims the market lead on Monday as shares of Nvidia, Tesla and Meta rise.

  • Coca-Cola expects momentum to continue in Q2 despite cautious consumers

    Investors are hoping Coca-Cola (KO) can maintain its momentum and report a positive quarter on Tuesday, Yahoo Finance’s Brooke DiPalma reports.

    Based on Bloomberg estimates, Wall Street expects revenue to come in at $11.76 billion, down 1.75% from a year ago. Earnings per share are expected to come in at $0.81, up 3.31% year-over-year.

    For comparison, Coca-Cola reported first-quarter revenue of $11.3 billion, beating Wall Street estimates of $10.96 billion. Earnings per share of $0.72 beat expectations of $0.70.

    The company’s price increases will drive growth again this quarter, according to CFRA analyst Garrett Nelson.

    Read more here.

  • Nvidia rises 4% as chip stocks recover

    Chip stocks rebounded Monday after a week of heavy losses in the semiconductor sector.

    Shares of AI major Nvidia (NVDA) rose more than 4% in early trading after falling more than 8% last week.

    Shares of chipmaker ASML (ASML) rose more than 3%. Semiconductor foundry TSMC (TSM) also rose.

    The chip sector has suffered significant losses recently as investors have dumped out of tech stocks. Those declines were exacerbated last week as geopolitical headwinds emerged for the semiconductor industry.

    Chip stocks recovered on Monday Chip stocks recovered on Monday

    Chip stocks recovered on Monday

  • Nasdaq opens higher after Biden withdraws from presidential race

    The major averages opened higher on Monday as investors assessed the course of the presidential election after President Joe Biden withdrew from the 2024 race.

    The S&P 500 (^GSPC) rose sharply, while the tech-heavy Nasdaq Composite (^IXIC) rose 1% at the open after both indexes ended Friday with their biggest weekly losses since April. The Dow Jones Industrial Average (^DJI) rose 0.1%.

    On Sunday, Biden canceled his re-election bid and endorsed Vice President Kamala Harris to replace him as the leader of the Democratic nomination slate.

    Investors are expecting a flurry of earnings numbers and a key PCE inflation release this week.

    Alphabet (GOOGL, GOOG), Tesla (TSLA) and Chipotle (CMG) are among the companies reporting their quarterly results this week.

  • Starbucks finds Elliott on its doorstep

    Good to see Starbucks (SBUX) waking up.

    WSJ reported Friday evening that Elliott Management has taken a stake in the ailing coffee seller.

    As is typical with Starbucks, they told Yahoo Finance they “do not comment on rumors or speculation.” But Elliott is now involved, based on my understanding of the situation.

    I’ve outlined 10 things wrong with Starbucks at X. Many of these problems are deep-seated issues that I’ve seen emerge over the past decade, so it’s unlikely that Elliott, despite all his power, can fix them.

    But Bernstein restaurant analyst Danilo Gargiulo sees a way to create shareholder value at Starbucks.

    There they are:

    • Invest in top talent and leadership with operational and restaurant experience.

    • Reduce store growth and accelerate the transition to more purpose-built stores.

    • Reset the value perception.

    • Accelerate throughput and improve predictability of service times.

    • Improve the customer experience.

    • Invest in purposeful innovation to attract loyal consumers and younger generations.

    • Restore brand neutrality regarding political views (move headquarters out of Seattle?).

    • Franchise of Chinese operations.

    • Optimize your spending.

    • Re-evaluate long-term goals and market expectations.

  • Eyes on: Nvidia

    Nvidia (NVDA) is taking a hit this morning, rising 2% in premarket after a bullish 30-day trading call from Citi.

    Atif Malik of Citi says:

    “We are opening a positive catalyst watch on NVDA ahead of the SIGGRAPH 2024 conference for three reasons. First, NVIDIA CEO Jensen Huang and Meta (META) CEO Mark Zuckerberg will likely discuss the future of AI and we believe NVIDIA could announce the long-awaited standalone Arm-based Grace CPU for servers. Second, the CEO discussion should shed positive light on how NVIDIA’s end customers are monetizing or their ROI profile, a major topic on investors’ minds these days. Third, we expect to hear an accelerating AI demand trend at the conference with no signs of an air pocket and view the stock’s recent pullback (13% price-to-earnings discount to 3-year average) due to geopolitical concerns as a buying opportunity.”

    SIGGRAPH begins on July 28. Huang will lead two informal talks.

  • One thing to watch in today’s session after Biden’s decision

    Keep an eye on the ‘Trump Trade’ after Biden’s decision not to seek re-election.

    Over the past month, stocks seen as tied to Trump’s potential policies have surged — for example, shares of Exxon Mobil Corporation (XOM) are up 5% over the past month. Lockheed Martin (LMT) is up 1.6%, outperforming the S&P 500 (^GSPC).

    According to BTIG’s policy expert Isaac Boltansky, this is the sentiment surrounding Trump Trade:

    “With a new Democratic presidential candidate expected, we could see a reversal of some of the market moves related to the ‘Trump Trade.’ This is understandable, as markets will be forced to reassess the odds of Trump winning without knowing his official challenger. Additionally, we believe Biden’s departure leaves the House more of a toss-up than a Republican. That said, we continue to view Trump as the slight favorite and note that many beneficiaries of a second Trump administration would be based on administrative shifts rather than legislative changes. These beneficiaries include private prisons, digital assets, and companies exposed to increased M&A. Trump’s trade policies would likely be largely the same in a divided government scenario. We still expect a point and extension on most of the $4.6 trillion in expiring tax provisions, but overall spending should be relatively easier in a divided government scenario.”

Leave a Comment