Biden's withdrawal is sanctioned by Wall Street
Joe Biden's withdrawal from the Presidential race boosts Tech values
Joe Biden's withdrawal from the Presidential race has led to rising stocks on Wall Street, particularly in the technology sector. The Nasdaq Index of the tech bourse closed 1.6% higher at 18,007 points. Investors had shifted away from the tech sector the previous week due to concerns over a trade war between the USA and China in the event of a Trump victory. The Dow Jones Index of standard values gained 0.3% to 40,415 points, and the broad S&P 500 rose 1.1% to 5,564 points.
Biden's announcement on Sunday that he would withdraw as a Presidential candidate could reduce bets on increased spending following a Republican victory, according to experts. Markets could also benefit from the growing prospect of a divided government - the dissolution of the President's party loyalty and that of the congressional majority, several analysts noted. The "fear gauge" of Wall Street, the VIX, dropped on Monday.
Dollar firm, Bitcoin steady
The Dollar was in demand as a "safe haven" and rose 0.1% against a basket of currencies to 104.36 points. Bitcoin fell 1.7% to $68,114, having slipped below the $66,000 mark following Biden's announcement on Sunday. "As long as investor sentiment prevails that Donald Trump will return as a protector of Bitcoin and Co to the White House, this could play in favor of cryptocurrencies," explained Timo Emden of Emden Research. Trump is seen as a supporter of a relaxed regulatory approach in the crypto industry in investor circles.
"I think the exit of Biden was largely priced in. We just needed a final decision," said Lou Basenese, Strategist at MDB Capital in New York. Other market participants saw no significant consequences for the markets. "The market is growing today because the big technology companies are back," observed David Spika, Strategist at Turtle Creek Wealth Advisors. "I don't believe Biden's withdrawal from the race will have an impact on the market, as politics will remain the same, regardless of whether it's Kamala Harris or someone else who becomes President." Following Biden's withdrawal, Harris has good chances of becoming the Democratic candidate.
Nvidia rebounding
Nvidia gained almost 5% in individual values. According to insiders, chipmaker Nvidia is reportedly working on a special version of its current AI chip for the Chinese market. This processor, developed in collaboration with its Chinese sales partner Inspur, is expected to be launched in the second quarter of 2025, according to several insiders.
Due to investors' fear of the financial consequences of Crowdstrike's update mishap, they once again dumped Crowdstrike from their portfolios, causing the cybersecurity firm's stock to plummet by over 13%. On Friday, a faulty software update from US company Microsoft applications caused a global outage, leading to massive IT system failures worldwide. "The global disruption caused by this event is likely to impact Crowdstrike's financial and operational performance," noted JP Morgan analysts. SentinelOne was identified as the "apparent beneficiary," with its shares experiencing gains of up to 14%.
Stocks associated with Trump showed mixed results: shares of his media company Trump Media & Technology Group took a rollercoaster ride and ended up nearly one percent in the red. In contrast, shares of software developer Phunware, who was contracted by Trump in 2020 to develop a mobile app for his campaign, saw gains of around four percent.
The rising stocks on Wall Street after Joe Biden's withdrawal from the Presidential race have led to an increase in interest in stock trading, with the technology sector, particularly tech giants like Nvidia, seeing significant gains. The Dow Jones Index, which includes a mix of standard values, also experienced a slight upward trend following this announcement.
The shifting sentiment in the stock market due to Biden's withdrawal has also impacted the 'Dow Jones', with investors viewing it as a potential opportunity for profit, leading to a rise in the index's value. Meanwhile, the value of Bitcoin, often seen as a non-traditional investment, has shown some volatility, potentially influenced by speculations about the regulatory approach towards cryptocurrencies under a potential Trump presidency.
