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Megacaps, Trump-linked stocks rise in premarket trading

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CrowdStrike ( CRWD ) slips after Friday's global cyber outage

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Nvidia ( NVDA ) jumps on report of new AI chip for China market

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Futures up: Dow 0.17%, S&P 500 0.52%, Nasdaq 0.84%

(Updated at 7:08 a.m. ET/1108 GMT)

By Ankika Biswas, Shubham Batra and Lisa Pauline Mattackal

July 22 (Reuters) - U.S. stock index futures rose on

Monday as investors weighed the odds of a second term for

Republican nominee Donald Trump in the November presidential

election after President Joe Biden bowed out of the race and

endorsed Kamala Harris's candidature.

Biden announced his withdrawal on Sunday and said he

supported Vice President Harris for the Democratic ticket.

Megacap stocks rose in premarket trading as investors

assessed the likelihood of another Trump White House. Meta

Platforms ( META ), Alphabet and Apple ( AAPL ) gained

between 0.8% and 1.3%.

At 7:08 a.m. ET, Dow e-minis were up 70 points, or

0.17%, S&P 500 e-minis were up 29 points, or 0.52%, and

Nasdaq 100 e-minis were up 165 points, or 0.84%.

Shares of Trump-linked stocks such as Trump Media &

Technology Group ( DJT ) and software firm Phunware ( PHUN )

edged 0.6% and 0.2% higher, respectively.

Biden's exit could prompt investors to unwind trades betting

that a Republican victory would increase U.S. fiscal and

inflationary pressures, while some analysts said markets could

benefit from an increased chance of a divided government under

the next administration.

"What had originally been looking to be a subdued start to a

week dominated by corporate earnings, US Q2 advance GDP and

monthly PCE deflators has been turned on its head," said Marc

Ostwald, global strategist at ADM Investor Services

International.

Most U.S. Treasury yields including the benchmark 10-year

bond yield, slipped after Biden's announcement,

while Wall Street's "fear gauge" traded at three-month

highs.

The uncertainty over the Democratic ticket is the latest

upheaval in the election cycle and comes as investors brace for

a bevy of key quarterly earnings, including from two of the

so-called Magnificent Seven companies - Google parent Alphabet

and Tesla. The question of whether the recent

rally in top-tier high-momentum stocks is tenable is on

everyone's minds.

Focus will also turn to crucial data throughout the

week, including the Personal Consumption Expenditures Price

Index - the Federal Reserve's preferred inflation gauge -

durable goods and second-quarter GDP for insight into the U.S.

central bank's monetary policy trajectory.

The combination of results and economic data will be a

key test for Wall Street after a three-session sell-off that saw

the Nasdaq and the S&P 500 logging their steepest weekly

declines since mid-April on Friday.

It will also test whether a rotation out of expensive

tech stocks to underperforming sectors will continue. Futures

tracking the small-cap Russell 2000 rose 0.5% after the

index posted its second straight weekly gain.

Traders have broadly priced in a 25-basis-point rate cut by

September and two cuts by the year-end, according to LSEG and

CME's FedWatch data.

Among single movers, Nvidia ( NVDA ) rose 1.8% after Reuters

reported the AI chip leader was working on a version of its new

flagship AI chips for the China market that would be compliant

with current U.S. export controls.

Verizon Communications ( VZ ) fell 2.5% after the company

reported revenue below analysts' expectations, while Truist

Financial ( TFC ) lost 1.7% after reporting a 33% drop in

second-quarter profit.

Cybersecurity firm CrowdStrike ( CRWD ) lost 3.5% after

a software update from the company sparked a global tech outage

on Friday that grounded flights, forced broadcasters off air and

left customers without access to essential services.