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Megacap stocks rise

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

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Verizon falls on Q2 revenue miss

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

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Indexes up: Dow 0.36%, S&P 0.86%, Nasdaq 1.23%

(Updated at 9:37 a.m. ET/1337 GMT)

By Ankika Biswas, Shubham Batra and Lisa Pauline Mattackal

July 22 (Reuters) -

Wall Street rose on Monday, regaining some ground after the

previous week's declines as investors assessed the odds of a

second term for Republican nominee Donald Trump in the November

election after President Joe Biden withdrew from the race.

Biden said on Sunday he

was opting out

and endorsed Vice President Kamala Harris's candidature.

Online betting site PredictIT showed pricing for a Donald Trump

victory slipped 4 cents, to 60 cents, while climbing 12 cents,

to 39 cents, for a Harris win.

Stocks firmed after a three-session sell-off, with megacap

shares gaining as the benchmark U.S. 10-year bond yield

slipped after Biden's announcement.

Alphabet, Microsoft ( MSFT ), Apple ( AAPL ) and

Tesla rose between 1% and 4.2%

The Information Technology index led sectoral

gainers, with all the major sector indexes except Energy

in the green.

At 9:37 a.m. ET, the Dow Jones Industrial Average was

up 145.49 points, or 0.36%, at 40,433.02, the S&P 500 was

up 47.57 points, or 0.86%, at 5,552.57, and the Nasdaq Composite

was up 218.04 points, or 1.23%, at 17,944.98.

Trump-linked stocks were mixed, with Trump Media &

Technology Group ( DJT ) reversing premarket gains and slipping

0.2%, while software firm Phunware ( PHUN ) gained 0.6%.

Biden's exit could prompt investors to unwind trades on bets

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

inflationary pressures. But some analysts said markets could

benefit from an increased chance of a divided government under

the next administration.

"There might be a bit of an unwind of the pro-cyclical

pro-small-cap trade we've seen if the odds of the race narrow a

little bit," said Ross Mayfield, investment strategy analyst at

Baird.

"But the rotation in the market has been more driven by

disinflation and the potential for rate cuts and a soft landing,

than anything political."

The question of who will be on the Democratic

presidential ticket compounds investor uncertainty as they brace

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

so-called Magnificent Seven companies - Google parent Alphabet

and Tesla.

Their results will test whether the recent rally in

top-tier high-momentum stocks is tenable and if a move to

underperforming sectors will continue. The small-cap Russell

2000 gained 0.6%.

Crucial economic data is due through the week, including

the Personal Consumption Expenditures Price Index - the Federal

Reserve's preferred inflation gauge that is expected to shed

light on the central bank's likely monetary policy path.

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 2.8% 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 5.4% after it missed

second-quarter revenue expectations.

Cybersecurity firm CrowdStrike ( CRWD ) slipped 8.3% and

was on track to extend losses after a software update from the

company sparked Friday's global tech outage.

Advancing issues outnumbered decliners by a 3.08-to-1 ratio

on the NYSE, and by a 2.55-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and no new

lows, while the Nasdaq recorded 16 new highs and 17 new lows.