The stock market is set to react tomorrow to the announcement that President Joe Biden will not seek reelection, which is expected to trigger volatility.
According to a Coinbase poll, Donald Trump and Kamala Harris are in a tight race for the support of crypto voters. This development highlights the economic uncertainty that is emerging as Democrats rush to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Market experts predict that news of Biden’s withdrawal could lead to significant fluctuations. “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty,” stated Josh Thompson, CEO of Impact Health USA. He emphasized that investors typically seek stability and predictability, factors that could be disrupted by such a major political change.
In light of this uncertainty, investors might turn toward safe-haven assets, such as gold, silver, and the Swiss franc, which are generally less affected by political and economic turmoil.
Additionally, there may be an impact on the so-called “Trump Trade,” which has gained momentum since Trump not only outperformed Biden in their debate but also survived an assassination attempt. This term refers to market trends and trading behaviors linked to the anticipated outcome of a second Trump presidency. During his time in office, Trump fostered a business-friendly environment, benefiting sectors like healthcare, banking, cryptocurrency, oil, and companies such as Tesla and Trump Media and Technology Group.
Even if Biden exits the race, analysts such as Raymond James’ Ed Mills suggest that they will maintain their electoral odds of 60% for Trump versus 40% for Biden or another Democrat. While there might be a temporary pause in the “Trump Trade” as the market reassesses the political landscape, a broader market reaction is not anticipated.