Joe Biden Drops Out — S&P 500 futures flat after worst week since April, Dollar edges lower

US futures on Wall Street are flat after they opened on Sunday evening post political developments of US President Joe Biden standing down from his re-election bid and endorsing Vice President Kamala Harris as the Democratic candidate for the upcoming elections.

The S&P 500 index futures are up 0.2%, while the futures linked to the Dow Jones and the Nasdaq composite are up 0.1% and 0.4% respectively.

Futures are seeing a muted reaction to Biden’s move and also coming on the back of the worst week since April for the S&P 500 and the Nasdaq. The Dow Jones though, was an outperformer, gaining 0.7% for the week.

Profit booking persisted on Wall Street even on Friday as investors continued to dump megacap tech stocks. The S&P 500 fell nearly 2%, while the Nasdaq Composite fell 3.7%.

Tech shares fell ahead of earnings reports this week, while CrowdStrike Holdings Inc., the firm behind a massive IT failure that grounded flights and disrupted corporations around the world, slumped as much as 15% before paring losses.

Meanwhile, the US Dollar has slipped in early Asian trading post Biden’s move overnight. A Bloomberg gauge of the US currency’s strength fell 0.2%, while the Mexican Peso climbed.

US longer-maturity bond futures rose more than their shorter-dated equivalents, pointing to a modest reversal of the so-called curve steepener trade associated with a victory for Donald Trump. In Asia, equity futures point to a mixed open after contracts in Australia and Japan fell in line with US stocks, while those for Hong Kong shares were steady.

Investors have mulled for weeks a greater prospect Trump will win the November election following Biden’s weak debate performance, only for bets on a Trump win to accelerate last week following an assassination attempt on the former president. The dollar rose for the first time in three weeks, while emerging market assets suffered amid fears of higher trade tariffs, increased US-China tensions and looser US fiscal policy.

The focus also remains on earnings and the US Federal Reserve. The traders are still hopeful of a 93% probability of the central bank cutting rates in September.

Tesla Inc. and Alphabet Inc. will be the first of the “Magnificent Seven” to report earnings on Tuesday. Analysts will likely press Elon Musk’s electric-vehicle giant on the progress of its plans for robotaxis. And investors will delve into the details of Google’s parent revenue boost from artificial intelligence.

With Inputs From Agencies.