Wall St picks up after sell-off as investors weigh Biden exit effect
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Megacap stocks rise
Nvidia jumps on report of new AI chip for China market
Verizon falls on Q2 revenue miss
CrowdStrike slips after Friday's global cyber outage
Indexes up: Dow 0.36%, S&P 0.86%, Nasdaq 1.23%
Updated at 9:37 a.m. ET/1337 GMT
By Ankika Biswas, Shubham Batra and Lisa Pauline Mattackal
July 22 (Reuters) - Wall Street rose on Monday, regaining some ground after the previous week's declines asinvestors assessed the odds ofa second term for Republican nominee DonaldTrump in the November electionafter President Joe Biden withdrew from therace.
Biden said on Sunday he was opting out and endorsed Vice President Kamala Harris's candidature. Online betting site PredictIT showed pricing for a Donald Trump victory slipped 4 cents, to 60 cents, while climbing 12 cents, to 39 cents, for a Harris win.
Stocks firmed after a three-session sell-off, withmegacap shares gaining as the benchmark U.S. 10-year bond yield US10YT=RR slipped after Biden's announcement.
Alphabet GOOGL.O, Microsoft MSFT.O, AppleAAPL.O and Tesla TSLA.O rose between 1% and 4.2%
The Information Technology index .SPLRCT led sectoral gainers, with all the major sector indexes except Energy .SPNY in the green.
At 9:37 a.m. ET, the Dow Jones Industrial Average .DJI was up 145.49 points, or 0.36%, at 40,433.02, the S&P 500 .SPX was up 47.57 points, or 0.86%, at 5,552.57, and the Nasdaq Composite .IXIC was up 218.04 points, or 1.23%, at 17,944.98.
Trump-linked stocks were mixed, with Trump Media & Technology Group DJT.O reversing premarket gains and slipping 0.2%, while software firm Phunware PHUN.O gained0.6%.
Biden's exit couldprompt investors to unwind trades on betsthat a Republican victory would increase U.S. fiscal and inflationary pressures. But someanalysts saidmarkets could benefit from an increased chance of a divided government under the next administration.
"There might be a bit of an unwind of the pro-cyclical pro-small-cap trade we've seen if the odds of the race narrow a little bit," said Ross Mayfield, investment strategy analyst at Baird.
"But the rotation in the market has been more driven by disinflation and the potential for rate cuts and a soft landing, than anything political."
The question of who will be on the Democratic presidential ticket compounds investor uncertaintyas they brace for a bevy of keyquarterly earnings, includingfrom two of the so-called Magnificent Seven companies- Google parent Alphabet GOOGL.O and Tesla TSLA.O.
Their results will test whether therecent rally intop-tier high-momentum stocks is tenable and if a move to underperforming sectors will continue. The small-cap Russell 2000 .RUT gained0.6%.
Crucial economic data is due through the week, including the Personal Consumption Expenditures Price Index - the Federal Reserve's preferred inflation gauge that is expected to shed light on the central bank's likely monetary policy path.
Traders have broadly priced in a 25-basis-point rate cut by September and two cuts by the year-end, according to LSEG andCME's FedWatch data.
Among single movers, Nvidia NVDA.O rose 2.8% after Reuters reported the AI chip leader wasworking on a version of its new flagship AI chips for the China market that would be compliant withcurrent U.S. export controls.
Verizon Communications VZ.Nfell 5.4% after it missed second-quarter revenue expectations.
Cybersecurity firm CrowdStrike CRWD.O slipped8.3% and was on track to extend losses after a software update from the company sparked Friday's global tech outage.
Advancing issues outnumbered decliners by a 3.08-to-1 ratio on the NYSE, and by a 2.55-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and no new lows, while the Nasdaq recorded 16 new highs and 17 new lows.
The Trump Trade https://tmsnrt.rs/3YeC3tB
Reporting by Shubham Batra, Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by Sherry Jacob-Phillips and Pooja Desai
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