The stock market is set to open tomorrow amid speculation that President Joe Biden will not seek reelection, creating an environment of expected volatility.
In related news, McDonald’s is confronting its first lawsuit stemming from the E. coli outbreak linked to its Quarter Pounder, making headlines as the fast-food giant faces scrutiny.
The potential decision by Biden would heighten economic uncertainty, as Democrats rush to rally support behind a new candidate, with Biden having endorsed Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, noted that an announcement from Biden regarding his withdrawal from the race would likely trigger volatility in the market. “Investors generally favor stability and predictability, and such a substantial political change would disturb both,” he remarked.
This uncertainty may lead investors to gravitate towards safe-haven assets like gold, silver, and the Swiss franc, which tend to be less affected by political and economic turbulence.
Additionally, the anticipated “Trump Trade” might experience a slowdown. This trade refers to market actions taken in response to the potential for a second Trump administration, particularly centered around the prospect of Donald Trump, a former president and current Republican nominee, who has shown strong performance against Biden in debates and survived an assassination attempt.
Analysts believe that sectors such as healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and Trump Media and Technology Group could greatly benefit from a Trump presidency.
Despite these dynamics, Raymond James Washington policy analyst Ed Mills mentioned that if Biden were to exit the race, they would not immediately alter their electoral odds of 60% for Trump against 40% for Biden/Democrats. Mills indicated that while a reassessment of the race could temporarily stall the recent “Trump trade,” he does not foresee any significant broader market reaction.