In a surprising turn of events, Vice President Kamala Harris has clinched the Democratic nomination for president, setting the stage for a showdown with former President Donald Trump this November. According to a Monday evening survey by the Associated Press, Harris has secured more than 1,976 delegates, positioning her as the likely nominee. What does this development mean for the stock market? CNBC’s Jim Cramer believes Harris could be a game-changer for Wall Street.
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Jim Cramer’s Bold Prediction
Jim Cramer, the ever-animated host of CNBC’s “Squawk on the Street,” is excited about Harris’s potential. He’s got a hunch that she might be just the ticket for Wall Street. “What she offers is a level of understanding about the greatness of the megacaps that Biden wanted no part of,” Cramer declared. His point? Harris’s California roots give her an edge with tech giants like Apple (AAPL) and Google (GOOGL), suggesting she might be more business-savvy than her predecessor. According to Cramer, Harris could help smooth out the rough edges of Biden’s tech policies and give the stock market a much-needed lift.
Market Reaction: Up, Up, and Away
The stock market seems to agree with Cramer’s optimism. On Monday, U.S. stocks had a bit of a party, with the Dow Jones climbing 128 points, the S&P 500 gaining 1.1%, and the Nasdaq leaping up by 1.6%. Tech stocks led the charge, with Nvidia (NVDA) and AMD (AMD) putting in particularly strong performances. It looks like investors are ready to embrace the Harris era, with hopes of a more favorable business environment lifting market spirits.
The Trump Trade Shake-Up
With Biden bowing out, the “Trump trade” strategies—where investors bet on stocks they think will benefit from Trump’s policies—are likely to face some changes. Jay Hatfield from Infrastructure Capital Advisors noted that Biden’s endorsement of Harris has eased some uncertainty. “The fact that Biden endorsed Kamala Harris reduces uncertainty,” Hatfield said. This might prompt investors to rethink their Trump-focused bets and adjust their portfolios accordingly.
What’s Next?
Despite the current upbeat mood, there’s still some turbulence ahead. The S&P 500 (SPX) recently faced a rough patch, and Deutsche Bank’s Henry Allen warns that the election season might bring more market jitters. “Markets are increasingly focused on the U.S. presidential election in November,” Allen noted.
As we approach November, the market might have a few more twists and turns up its sleeve. As Kamala Harris gears up to take center stage, the financial world will be keeping a close eye on how her candidacy might shake up the market. For now, it seems like Wall Street is cautiously optimistic about what’s to come.
