Finance Buddies, one week after the assassination attempt on Donald Trump, US President Joe Biden has decided to withdraw from the 2024 presidential race on July 21, 2024, and endorse Vice President Kamala Harris as the Democratic Party’s nominee. Investors have become more cautious about the market response to recent political events, coupled with widely expected rate cuts by the Federal Reserve in September. Uncertainties are mounting and may cause further risk-off actions in markets.
Lately, uncertainty has crept into the economy and the markets. And with Sunday’s stunning announcement from President Joe Biden that he is dropping out of the presidential race, it is only likely to increase. So how does Biden’s withdrawal affect various markets? Let’s find out!
Biden’s Withdrawal Impacts on Various Markets
1. US Stocks
According to Market Watch, U.S. stocks ended higher on Monday, July 22, 2024 as Wall Street digested President Joe Biden’s withdrawal from the 2024 presidential race, while investors looked forward to earnings from Big Tech companies.
Tech stocks led the gains on Monday, July 22, 2024, after a rotation out of megacap tech companies last week turned into a full-scale retreat that saw the S&P 500 log its worst weekly performance since April.
The Dow Jones Industrial Average went up 127.91 points or 0.3% to end at 40,415.44, according to Dow Jones Market Data. The S&P 500 rose 59.41 points or 1.1% to finish at 5,564.41, snapping a three-day losing streak. The Nasdaq Composite advanced 59.41 points or 1.1% to close at 18,007.57, also snapping a three-day losing streak. The Russell 2000 added 35.30 points, or 1.7%, to end at 2,220.65.
Small-cap stocks in the U.S. were picking up steam Monday afternoon, with the Russell 2000 index rallying almost 1%. The Russell 2000 index was up 0.9% in afternoon trade, according to FactSet data, at last check. That compares with a gain of 1.1% for the S&P 500, which is a gauge of large-cap stock in the U.S.
2. Oil
Oil prices on Monday, July 22, 2024, held ground at their lowest levels since mid-June, pressured by worries surrounding the outlook for demand and prospects for even higher U.S. production.
The improved prospects of a Donald Trump victory in the 2024 election are “price-negative for oil as he has said he plans to support production increases to increase energy independence and lower prices,” said Tyler Richey, co-editor at Sevens Report Research.
August West Texas Intermediate crude, which expired at the end of the session, lost 35 cents, or 0.4%, to settle at $79.78 a barrel on the New York Mercantile Exchange, the lowest since June 14. The new front-month contract, September WTI crude, lost 24 cents, or 0.3%, at $78.40. September Brent crude settled at $82.40 a barrel on ICE Futures Europe, down 23 cents, or 0.3%.
3. Gold
Gold prices declined on Monday, July 22, 2024, looking to stretch their losses into a fourth straight session, after ending last week with their largest one-day percentage loss in six weeks.
Prices for the precious metal briefly saw some support in the wake of news that President Joe Biden has withdrawn from the U.S. presidential race. Biden’s exit has led some investors to unwind trades betting on former President Donald Trump’s victory, according to market analyst Rania Gule.
But, the main market driver for gold will be U.S. inflation data, which in turn will drive demand for the U.S. dollar in the near term and provide new directional momentum for commodities and gold if it comes in stronger than expected.
So, Finance Buddies, those are the impacts of Biden’s withdrawal on various markets. Pay attention to market developments and stay informed to make better investment decisions.
To become a knowledgeable investor, always check out the Invlinic blog! There will be plenty of information on financial planning, investments, trading, and the latest updates in the financial world.
