Investing.com -- U.S. stocks rose Monday after President Joe Biden withdrew his bid for reelection, rebounding after the previous week's hefty losses amid a rotation out of the major technology stocks.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average rose 185 points, or 0.5%, the S&P 500 gained 44 points, or 0.8% and the NASDAQ Composite climbed 215 points, or 1.1%.
The tech-heavy Wall Street indexes suffered bruising losses last week, as growing expectations of interest rate cuts saw investors rotate out of heavyweight technology stocks and into more economically-sensitive sectors.
Biden pulls out of race, Harris seen as Democrat nominee
Biden’s withdrawal comes amid growing calls from members and donors of his party for him to step down, amid concerns over his mental health and that he may not be able to effectively run against the Republican candidate Donald Trump.
Biden, the 46th president, endorsed Vice President Kamala Harris as his successor, but she still needs to be officially nominated by the Democratic Party, with a vote due in August. Trump was nominated as the Republican presidential candidate last week.
CBS polling data from last week showed Trump polling better than Biden, especially in the wake of a failed assassination attempt on the former president. It also showed Trump had a slight edge over Harris.
“Trump’s stated policies include broad-based import tariffs, immigration limits and a pullback from treaty commitments. As Trump’s polling results have lifted, markets have favored trades anticipat(ing) more trade barriers and possibly higher inflation,” ANZ analysts wrote in a note.
“Some polls have Harris performing better than Biden against Trump, and the Democrats will be hoping the next polls feature a Harris-driven bump.”
Tech stocks start to release earnings
Aside from the political upheavals, the focus this week is likely to be on key second-quarter earnings from the tech sector, which are expected to offer more cues on the main drivers of a technology rally this year, specifically artificial intelligence.
There are earnings from important companies like Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA), due on Tuesday, with investors seeking more knowledge on how the two plan to further incorporate artificial intelligence into their products, while Tesla will also be watched as it grapples with slowing sales.
Earnings from other majors, including Lockheed Martin (NYSE:LMT), General Electric (NYSE:GE), Texas Instruments(NASDAQ:TXN) and Visa (NYSE:V) are also on tap in the coming days.
As far as Monday is concerned, Verizon Communications (NYSE:VZ) stock fell over 3% after the telecommunications giant reported disappointing quarterly revenues even as it added more wireless subscribers than expected in the second quarter, at discounted prices.
Chinese rate cut has little impact on crude
Crude prices slipped lower Monday, with the surprise Chinese interest rate cut, aimed at boosting the second largest economy in the world, having little impact on sentiment.
By 09:35 ET, the U.S. crude futures dropped 0.9% to $77.97 a barrel, while the Brent contract fell 0.7% to $82.06 a barrel.
Concerns over sluggish demand in China, the world’s biggest oil importer, have weighed on the market, especially following last week's softer-than-expected growth figures for the second quarter.
(Ambar Warrick contributed to this article.)