Traders work on the floor of the New York Stock Exchange on July 11, 2024.
Spencer Pratt | Getty Images
S&P 500 futures were up slightly late Sunday after posting their worst weekly drop since April last week as investors shifted money from large tech stocks to mid-cap names.
Futures tracking the Composite Index rose 0.1%. Futures for the Dow Jones Industrial Average and Nasdaq 100 both rose about 0.1%.
Traders were also keeping a close eye on the U.S. political situation after President Joe Biden on Sunday withdrew from the presidential race and endorsed Vice President Kamala Harris as the Democratic nominee. After Biden’s disastrous defeat in the June debate, many analysts saw former President Donald Trump’s chances of victory in November’s debate as increasing.
Jay Hatfield, CEO of Infrastructure Capital Advisors, said he expected the stock market reaction to Biden’s departure to be “muted” because of growing calls for him to drop out of the presidential race.
“The fact that Biden has endorsed Kamala Harris reduces uncertainty, and that may dilute Trump’s support a little bit on Monday because VP Harris looks slightly more likely to win,” Hatfield said.
Earnings and central bank policy will also be top of mind. Traders are pricing in a nearly 93% chance that the Federal Reserve will cut interest rates when it meets in September. With that in mind, investors are selling off big tech stocks in favor of interest-rate sensitive stocks like small caps and industrials that would benefit from a market rally.
In the previous trading week, the S&P 500 and Nasdaq Composite Indexes fell about 2% and 3.7%, respectively, their biggest weekly losses since April, while the Dow rose 0.7% and the small-cap-heavy Russell 2000 added 1.7%.
On the earnings front, investors will be keeping an eye on Verizon’s quarterly results on Monday morning, with no major economic data expected until later this week.
