Market Reactions to Biden's Campaign Exit and Central Bank Moves

As President Joe Biden exits the race and backs VP Kamala Harris, the market reacts with slight adjustments. Harris gains traction for the Democratic nomination, while a rate cut from China's central bank and concerns over U.S. chip sales impact global markets. Key earnings and speeches will influence Monday’s market activity.

President Joe Biden's decision to drop out of the race and endorse VP Kamala Harris has elicited a measured market reaction. Wall Street futures inched higher, bond yields dipped, and the dollar remained stable. Harris is now in the lead for the official Democratic nomination, which is scheduled for August 19-22.

Goldman Sachs reports that Harris' nomination is unlikely to significantly alter the Democrats' fiscal and trade policy. Another major development was a 10-basis point rate cut by China's central bank, causing a slight dip in bond yields and the yuan. Analysts believe the move underscores the persistent weakness in China's economic recovery.

In Asia, Taiwan faced selling pressure due to concerns over U.S. chip sales and potential Trump administration tariffs. The tech sector saw significant shifts, erasing $900 billion from the S&P 500's technology sector. This week, second-quarter earnings from Tesla and Alphabet will be closely monitored. Key events on Monday include a speech by Bank of England's Victoria Saporta and the release of the Federal Reserve Bank of Chicago's National Activity Index for June.

(With inputs from agencies.)