The stock market is set to open tomorrow amid reports that President Joe Biden will not seek reelection, leading to expected volatility.
In related news, a delivery partnership between Uber and Darden Restaurants is driving the latter’s stock prices higher.
Biden’s announcement is likely to create economic uncertainty as Democrats scramble to rally behind a new candidate, with the President endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, commented on the situation, stating that if Biden withdraws from the race, the market is likely to experience significant volatility. He noted that investors typically favor stability, and such a political shift could disrupt that stability.
This uncertainty may encourage investors to seek safe-haven assets, such as gold, silver, and the Swiss franc, which tend to be more resilient during periods of political and economic turmoil.
Furthermore, the development might impact what is referred to as the “Trump Trade,” which has gained momentum since the former president excelled in recent debates and survived an assassination attempt. This term describes market behaviors and trading patterns related to the prospects of a second Trump administration. Trump’s presidency was seen as favorable to business interests, benefiting sectors such as healthcare, banking, cryptocurrency, and oil, as well as companies like Tesla and Trump Media and Technology Group.
Ed Mills, a policy analyst at Raymond James, mentioned that while his firm currently maintains a 60% chance for Trump versus a 40% chance for Biden or another Democrat, they anticipate a potential pause in the “Trump Trade” as the market reassesses the political landscape, though he does not expect a significant overall market reaction.