The stock market is poised for significant volatility as it prepares to open tomorrow following the news that President Joe Biden will not seek reelection. This announcement is expected to create economic uncertainty as Democrats scramble to rally support behind a new candidate, with Biden reportedly endorsing Vice President Kamala Harris as his successor.
Josh Thompson, CEO of Impact Health USA, expressed to Yahoo Finance that if President Biden officially withdraws from the race, the market would likely experience sharp fluctuations. Investors typically favor stability and predictability, and such a major political change would disrupt that.
As a result, this uncertainty might drive investors towards safe-haven assets, including gold, silver, and the Swiss franc, which tend to remain stable amid political and economic turmoil.
Additionally, there’s a chance the so-called “Trump Trade” could stall. This refers to market behaviors and investment strategies that have developed in response to the potential of a second Trump administration, particularly following his strong performance in debates and a recent assassination attempt.
The Trump Trade benefits several sectors, including healthcare, banking, cryptocurrency, and oil stocks, along with companies like Tesla and Trump Media and Technology Group.
Despite the upheaval, Raymond James policy analyst Ed Mills indicated that the firm would maintain its electoral odds at 60% for Trump versus 40% for Biden or another Democrat. Mills noted that, while there might be a temporary stall in the Trump Trade as the markets reassess the political landscape, a widespread market reaction is not anticipated.