The stock market is poised for a turbulent opening tomorrow following the announcement that President Joe Biden will not seek reelection. This development is expected to lead to significant market volatility.
In particular, Trump Media shares are struggling, experiencing a substantial decline. The political landscape is shifting as Democrats rally to support a new candidate, with Biden endorsing Vice President Kamala Harris as a front-runner.
Josh Thompson, CEO of Impact Health USA, commented on the potential market impact, stating, “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty. Investors generally prefer stability and predictability, and such a significant political shift would disrupt both.”
This uncertainty may drive investors towards safe-haven assets, such as gold, silver, and the Swiss franc, which typically show resilience during times of political and economic turmoil.
Additionally, there could be a halt in the so-called “Trump Trade,” which has gained traction since Donald Trump, the former president and current Republican nominee, performed strongly in debates and survived an assassination attempt. This term describes the market’s response to the possibility of a Trump second term, with potential beneficiaries including healthcare, banking, cryptocurrency, and oil sectors, along with companies like Tesla and the Trump Media and Technology Group.
Ed Mills, a policy analyst at Raymond James, noted that while Biden’s exit from the race could stall the recent “Trump trade,” he does not foresee a significant broader market reaction. Mills reported this perspective in a note distributed to CNBC last week.