The stock market is set to experience fluctuations as President Joe Biden has announced he will not seek reelection. This development is expected to heighten economic uncertainty, particularly as Democrats begin rallying behind a new candidate, with Biden endorsing Vice President Kamala Harris as a potential nominee.
Analysts predict that if Biden officially withdraws from the race, the stock market will react with volatility. Josh Thompson, CEO of Impact Health USA, stated that investors typically prefer stability, and such a major political change could disrupt the current economic climate.
This uncertainty may drive investors to seek safe-haven assets, such as gold, silver, and the Swiss franc, which tend to perform better in times of political or economic unrest. Additionally, the so-called “Trump Trade,” which has gained traction since former President Donald Trump outperformed Biden in a debate and survived an assassination attempt, could face a slowdown. The Trump Trade reflects the market’s responses to the potential of a second Trump administration, particularly benefiting sectors like healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group.
However, analysts like Ed Mills from Raymond James suggest that the projected electoral odds of 60% for Trump and 40% for Biden/Democrats will remain unchanged for the time being. Mills indicated that while there might be a temporary stall in “Trump Trade” activity, a more significant market reaction is not expected.