US stock futures rebounded on Monday following the market's reaction to President Joe Biden's announcement that he would not seek re-election in 2024. This decision sparked uncertainty among investors, with many beginning to price in a potential victory for former President Donald Trump in the upcoming election.
Investors engaged in 'Trump trades,' buying stocks they believed would benefit from Trump's tariff-heavy agenda while selling off stocks related to green energy and other industries that could be negatively impacted by his policies.
Concerns have been raised by economists that Trump's policies could worsen America's inflation problem and increase the US deficit. As Trump's popularity has grown in recent weeks, US Treasury prices have fallen and yields have risen in anticipation of higher inflation.
With the Democratic party now appearing to rally around Vice President Kamala Harris as a potential nominee, some of the Trump trades may be put on hold until polling data indicates whether Harris could pose a stronger challenge to Trump than Biden.
On Monday, Dow futures rose by 60 points (0.2%), S&P 500 futures were up by 0.4%, and Nasdaq futures saw a 0.7% increase. European markets also showed gains, while Asian markets closed mostly lower. US Treasuries experienced a slight rise, leading to lower yields, and the dollar weakened against major currencies.
