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As Democrats and big donors rally around Kamala Harris, her political track record is taking center stage. Her policy proposals are a little bit more complicated than, you know, simply putting her into a category of how the Democratic Party is usually divided up between moderates and progressives. And the Secret Service director's testimony before Congress about the near assassination of Donald Trump sparks bipartisan calls for her resignation.
Plus, why the stock market has turned upside down, calling into question the future of this year's big tech-driven rally. It's Monday, July 22nd. I'm Francesca Fontana for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Kamala Harris is gaining support as the likely Democratic presidential nominee after President Biden dropped his bid for re-election.
The vice president has gotten a wave of endorsements, including from Biden yesterday and from former House Speaker Nancy Pelosi today. Harris and her allies have also sprung into action to consolidate support from big donors, including George Soros and Reid Hoffman.
Earlier, Harris made her first public appearance since Biden's exit, filling in for the president at a celebration for NCAA championship teams as he recovers from COVID. In her comments, which were brief, she praised Biden's legacy, but didn't mention the upcoming contest for the Democratic nomination or the presidential campaign.
It's important to note here that while Harris is the most visible candidate to potentially replace Biden, there's no guarantee she'll be on the ticket. And the Democratic Party is in uncharted territory as it moves to select a new nominee.
Still, Harris is now the likely Democratic presidential nominee, bringing to the fore her policymaking record, her governing style, and what could lie ahead if she wins the party's nomination. White House reporter Tarini Party joins me to discuss the vice president's policy views. So, Tarini, what have we seen from Harris's positions in the past as California attorney general, as a senator, and as a presidential candidate in 2020?
So unlike the president, who obviously was on Capitol Hill for a long time, he had built his career on legislative dealmaking, policy proposals. Harris has had sort of a different trajectory. Her national profile was built on her legal experience. So her record is a little bit harder to sort of cobble together. We know a lot about her policy proposals from her 2020 presidential campaign, which, of course, lasted only a few months. She dropped out of that race before 2020.
voting started. We have her voting record from her limited time in the Senate. And then, of course, she was attorney general in California.
And in talking to people who've worked with her, she's someone who I was told can be pretty pragmatic. She thinks of policy decisions on a case-by-case basis. She tries to ask how this would affect women, children, minorities. So her policy proposals are a little bit more complicated than simply putting her into a category of how the Democratic Party is usually divided up between moderates and progressives.
How have Harris's stances corresponded with President Biden's?
She also proposed a much more moderate proposal when she ran for president. And then when she joined the Biden presidential ticket, she supported his plan. There was definitely some disparity there between the two. Harris opposed the two recent major trade deals that Biden has supported, which were the U.S.-Mexico-Canada agreement.
which was the renegotiated version of NAFTA that was done under the Trump administration. She also opposed the Trans-Pacific Partnership, saying that it didn't do enough to protect environment and worker regulations. How does Wall Street see her?
So on Wall Street, Harris earned a reputation as more of a progressive firebrand in part because of her role as attorney general of California during the mortgage foreclosure crisis, including a testy back and forth that she had with Jamie Dimon, the JPMorgan Chase chief executive. And we actually found out through our reporting that Dimon recently had lunch with Harris in March and said,
He came away, we've learned, from this meeting thinking of her as sort of a more reasonable politician and one he thought he could work with in terms of figuring out ways for government and corporations to work together. And if she ends up leading the Democratic ticket, how is Harris expected to stick to or change positions of the Biden-Harris campaign?
For the most part, at this point, it's still very early. But from what we've learned, we think that she's most likely going to stick to his big policy ideas, focusing on abortion rights, talking about the Supreme Court's decision, of course, to overturn Roe v. Wade and how that's affecting women across the country. She's also been reiterating what we've heard a lot from Biden, that
another Donald Trump term would serve as a threat to democracy. So, so far, we've heard her on the campaign trail kind of talk about the same sort of policy proposals that Biden has been touting. And so we expect her to do the same. She was a big part of the administration. She's vice president. So we expect her to continue to do that. That was White House reporter Tarini Pardee.
Many companies are pulling back on work-from-anywhere policies. Have you worked remotely? What questions do you have about the issues you've faced or heard about? Send a voice memo to WNPOD at WSJ.com or leave a voicemail with your name and location at 212-416-4328. We might use it on the show. Coming up, you might have noticed the stock market has turned upside down lately, putting a speed bump in Big Tech's rally. We explain why after the break.
We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart. Learn more at AmazonBusiness.com. Today on The Hill, Secret Service Director Kimberly Cheadle offered lawmakers few answers about how a 20-year-old gunman was able to open fire on former President Donald Trump from an open rooftop at his campaign rally.
Her testimony before the House Oversight Committee fueled bipartisan anger and widespread calls for her resignation in the wake of what she acknowledged was a colossal security lapse. Cheadle declined to answer questions about how the security perimeter was drawn for the rally, whether law enforcement swept the roof in advance, or how many agents were assigned to the event, saying a review of the breakdown is ongoing.
In one revealing exchange, Cheadle suggested that the security team with Trump before he took the stage didn't know that he was facing an active threat. If the detail had been past information that there was a threat, the detail would never have brought the former president out onto stage. The Secret Service director has said she won't resign, and Homeland Security Secretary Alejandra Mayorkas has voiced full confidence in her.
If you've been paying attention to the stock market lately, you might be feeling like it's opposite day. The big tech stocks that are normally up are down, and the smaller stocks that typically lag behind are now springing to life. And this phenomenon is making stock market history. According to Dow Jones market data, the small-cap Russell 2000 index beat the S&P 500 over the seven days through last Wednesday by the largest margin during a seven-day period, based on records going back to 1986.
Here to explain is Markets Reporter Karen Langley. Karen, what's driving this dramatic shift out of big tech and into smaller cap stocks? This rotation in the stock market seemed to kick off with a report that showed that inflation had actually been cooler than economists expected. And what we saw was just small cap stocks and stocks that are in more economic
economically sensitive parts of the market just taking off, which is a big change because investors have been used to the big tech stocks really just driving the market. And so now investors are really scrambling to try to figure out, is this just a blip and we're going to go back to the big tech stocks leading the market? Or could this actually be the start of a more sustainable new time in market leadership? So where will investors be looking for clues?
Investors are going to be watching really closely the earnings reports that are coming out this week and next. There are earnings reports expected from some of the biggest tech companies like Alphabet, for example. And so they're going to want to see what those companies have to show for their results, but also their forecasts of business going forward and investing.
Investors are also going to be really scrutinizing reports from the smaller companies, the ones that have been rallying recently. There are several hundred members of the Russell 2000 small cap index expected to give reports this week. So investors are just going to be pouring through all of those various data points and comments coming out as they try to figure out what the next leg of the stock markets rally might look like.
Why is the rotation happening now? So the cooler than expected inflation is making investors much more confident that the Federal Reserve may be about to finally start cutting interest rates. And higher interest rates don't impact all companies equally. They tend to be tougher on smaller companies and more economically sensitive ones. Small cap stocks, for example, tend to have more
more of their debt that is floating rate than to large cap stocks. And so those small companies in particular can really, you know, find themselves paying the price when interest rates go up. So now that investors think their rates actually might be on their way back down, they're thinking that that debt burden, for example, could become a little bit easier for smaller companies to pay. And they're also thinking ahead to when
rate cuts stimulate the economy and that this that could have a disproportionately helpful effect on smaller companies and more economically sensitive companies. How is this rotation being affected by the political landscape?
So, investors have told me in recent days that there is just increased uncertainty with the whole political dynamic that they really can't say for sure what is going to happen with the outcome of the presidential election in November. The stock market reaction has seemed fairly muted to the news that President Biden is not going to be continuing to campaign for a second term. And so,
Investors are really just processing all of this news coming at them and trying to figure out what could this actually mean for the value of the companies that they're buying and selling. That was Markets reporter Karen Langley. In markets, tech stocks caught a break today. A big rebound in technology shares helped lift the major stock indexes, powered in large part by chipmakers like NVIDIA.
The tech-heavy Nasdaq Composite rose 1.6% after dropping more than 4% over the last three trading sessions. The S&P 500 rose about 1%, snapping a three-day losing streak. And the Dow Jones Industrial Average added 0.3%, or roughly 128 points.
And that's What's News for this Monday afternoon. Today's show was produced by Pierre Bien-Aimé with supervising producer Michael Cosmitas. I'm Francesca Fontana for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.
We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart. Learn more at amazonbusiness.com.
