Jay Hatfield, CEO at Infrastructure Capital Advisors, said h...

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.