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Megacaps, Trump-linked 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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Futures up: Dow 0.21%, S&P 500 0.67%, Nasdaq 1.07%

(Updated at 8:34 a.m. ET/1234 GMT)

By Ankika Biswas, Shubham Batra and Lisa Pauline Mattackal

July 22 (Reuters) -

Wall Street was poised to open higher on Monday as investors

weighed the odds of a second term for Republican nominee Donald

Trump in the November election after President Joe Biden

withdrew from the race and endorsed Kamala Harris's candidature.

Megacap stocks rose in premarket trading, with most U.S.

Treasury yields including the benchmark 10-year bond yield

edging lower after Biden's announcement. Meta

Platforms ( META ), Alphabet, Amazon.com ( AMZN ) and

Apple ( AAPL ) gained more than 1% each.

At 8:34 a.m. ET, Dow e-minis were up 85 points, or

0.21%, S&P 500 e-minis were up 37 points, or 0.67%, and

Nasdaq 100 e-minis were up 210 points, or 1.07%.

Biden's exit on Sunday could prompt investors to unwind

trades on bets that a Republican victory would increase U.S.

fiscal and inflationary pressures. But some analysts also said

markets could benefit from an increased chance of a divided

government under the next administration.

Trump-linked stocks such as Trump Media & Technology Group ( DJT )

and software firm Phunware ( PHUN ) rose 0.4% and 1.4%,

respectively.

"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."

Wall Street's "fear gauge" edged lower, but

remained at a three-month high, reflecting mounting investor

unease.

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 now on everyone's minds.

Focus will also turn to crucial data through 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 central bank's

monetary policy trajectory.

The combination of results and economic data will be a

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

Nasdaq and the S&P 500 log 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 4% after it missed

second-quarter revenue expectations.

Cybersecurity firm CrowdStrike ( CRWD ) lost 4.5% and

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

company sparked Friday's global tech outage, grounding flights,

forcing broadcasters off air and leaving customers unable to

access essential services.