S&P 500 futures inched up Monday after the broad market index suffered its worst weekly losses since April last week as investors rotated out of megacap technology stocks for smaller names. Futures tied to the broad market index gained 0.5%. Dow Jones Industrial Average and Nasdaq-100 futures added 0.2% and 0.7%, respectively. Traders also kept an eye on the U.S. political landscape after President Joe Biden dropped out of the presidential race on Sunday and endorsed Vice President Kamala Harris. Since Biden’s disastrous debate performance in June, many analysts were seeing an increasing likelihood of a win by former President Donald Trump in November. Jay Hatfield, CEO at Infrastructure Capital Advisors, said he expects a “muted stock market reaction” to Biden’s resignation from the presidential race, as it had been largely expected as calls for him to bow out grew louder. “The fact that Biden endorsed Kamala Harris reduces uncertainty. There may be a small unwinding of the Trump trade on Monday as Vice President Harris is perceived to have a slightly better chance of winning,” Hatfield said. Earnings and central bank policy will also be top of mind. Traders have been pricing in nearly a 93% likelihood of the Federal Reserve cutting interest rates during its September meeting. With this in mind, investors have been selling off the big tech winners of the market rally, in favor of rate-sensitive stocks such as small caps and industrials that stand to benefit from lower rates. During the previous trading week, the S&P 500 and Nasdaq Composite fell nearly 2% and 3.7%, respectively, marking their biggest weekly losses since April. On the other hand, the Dow advanced 0.7%, while the small cap-focused Russell 2000 gained 1.7%. On the earnings front, investors will be looking toward Verizon’s quarterly results Monday morning. No major economic updates are expected until later in the week. U.S. Treasury yields were lower on Monday as investors awaited key economic data slated for the week and markets considered the latest U.S. political developments. At 6:47 a.m. ET, the yield on the 10-year Treasury was down by over 1 basis point at 4.224%. The 2-year Treasury yield was last flat at 4.517%. Asia-Pacific markets fell on Monday, as news emerged that U.S. President Joe Biden had dropped out of the presidential race and endorsed Vice President Kamala Harris as the Democratic nominee. Hong Kong’s Hang Seng index was at 1.22% as of its final hour of trade after the PBOC’s announcement, while mainland China’s CSI 300 lost 0.68% to close at 3,514.92. The offshore Chinese yuan weakened 0.1% to trade at 7.2922 against the greenback. The Taiwan Weighted Index led losses in the region, tumbling 2.68% to close at 22,256.99, dragged by industrial and tech stocks. Japan’s Nikkei 225 fell 1.16% to end at 39,599, while the broad-based Topix also was down by the same measure to close at 2,827.53. This was the first time in three weeks that the Nikkei dipped below the 40,000 mark. South Korea’s Kospi dropped 1.14% lower to 2,763.51, while the small-cap Kosdaq saw a larger loss of 2.26% and ended at 809.96. Australia’s S&P/ASX 200 dropped 0.5%, ending the day at 7,931.7. Oil prices rose in early trade on Monday as investors keep a lookout for signs of a rate-cut cycle expected to begin as soon as September. Brent crude prices were up 48 cents, or 0.57%, at $83.10 a barrel by 0035 GMT, and U.S. West Texas Intermediate crude futures rose 42 cents, or 0.52%, to $80.55. Gold prices edged up on Monday as the dollar weakened in response to President Joe Biden’s decision to withdraw from the 2024 presidential race, while the market geared up for Friday’s U.S. personal consumption expenditures (PCE) data for further clues on the timing of interest rate cuts. Spot gold rose 0.2% to $2,404.95 per ounce, while U.S. gold futures gained 0.3% to $2,406.50. The dollar eased following Biden’s decision on Sunday to abandon his re-election bid, making bullion more attractive to buyers holding other currencies.