Tesla and Alphabet Earnings in Focus

Markets shifted focus from Joe Biden’s withdrawal from the US presidential race back to earnings, with Tesla and Alphabet set to report after market close. Tesla’s profit margins are expected to have fallen, while Alphabet is anticipated to show strong revenue growth. European luxury stocks gained following rate cuts in China, despite recent profit warnings from Burberry and Hugo Boss.

Equities

The FTSE 100 rose by 0.5%, while the mid-cap FTSE 250 gained 0.3%, both rebounding from Friday's declines. Rentokil surged 7.8% following reports that former BT Group chief Philip Jansen is working on a private equity-backed takeover bid for the pest-control firm. Entain climbed 1.8% after announcing Gavin Isaacs as its new CEO, effective September 2nd. Ocado jumped 12.2% as its US partner Kroger placed an order for new automated technologies. Conversely, Wizz Air slid 10% after Ryanair missed quarterly profit estimates.

On Wall Street, major indices saw gains, driven by a return to megacap growth stocks. The S&P 500 climbed 1.08% to 5,564.41 points, and the Nasdaq Composite rose 1.58% to 18,007.57 points. The Dow Jones Industrial Average increased by 0.32% to 40,415.44 points.

Megacap stocks Alphabet, Meta Platforms, and Tesla advanced between 2.2% and 5.1% after being major drags on the market last week. Nvidia rose 4.8% on news of a new AI chip for the China market compliant with US export controls.

CrowdStrike slumped 13.5% due to a global tech outage caused by a software update. Delta Air Lines dropped 3.5% after cancelling over 600 flights due to the same outage. Verizon fell 6.1% following a second-quarter revenue miss.

Mattel soared 15.1% after reports that buyout firm L Catterton showed interest in acquiring the company. Meanwhile, Trump Media & Technology Group dropped 0.8%, while Phunware gained 4%, reflecting mixed reactions to President Biden’s withdrawal from the presidential race and his endorsement of Vice President Kamala Harris.

Forex & Commodities

The US dollar rose slightly on Monday after President Joe Biden announced he was ending his re-election campaign, but weakened against the yen due to expectations of rate hikes from the Bank of Japan. The dollar index, which measures the greenback against a basket of currencies, increased by 0.1% to 104.32.

The dollar also firmed 0.1% to 7.29 yuan in offshore trading after the People’s Bank of China cut key interest rates to boost the economy. The dollar fell 0.3% against the yen to 157.10 yen, while the euro remained flat at $1.0886. The dollar also fell 0.6% against the Mexican peso, reacting to Biden’s exit.

Gold prices dropped to a one-week low, with spot gold falling 0.2% to $2,394.18 per ounce, as the stronger dollar made the metal more expensive for holders of other currencies. US gold futures settled 0.1% lower at $2,394.70.

Oil prices declined for the second consecutive session, reaching their lowest levels in over a month. Brent crude futures fell by 0.3% to $82.40 per barrel, and US West Texas Intermediate crude futures for August delivery dropped 35 cents to $79.78 per barrel.

In cryptocurrencies, investors are preparing for the launch of ether ETFs, with ether down 0.3% at $3,496, while bitcoin rose 1.8% to $68,182.