The stock market is poised for a turbulent opening tomorrow following the announcement that President Joe Biden will not seek reelection, leading to expected volatility.
According to a strategist, the recent 20% drop in Nvidia stock could indicate a positive trend for the market. As Biden’s decision stirs economic uncertainty, Democrats are hurrying to unite behind a new candidate, with Biden having endorsed Vice President Kamala Harris as the presumptive nominee.
Josh Thompson, CEO of Impact Health USA, expressed that if Biden were to withdraw from the race, the market would likely react with volatility and apprehension. He emphasized that investors generally favor stability, and a major political shift could disrupt that.
This uncertainty may drive investors toward safe-haven assets such as gold, silver, and the Swiss franc, known for their resilience during times of political and economic instability.
Another consequence could be the slowing of the so-called “Trump Trade.” This term describes market behaviors and investor actions linked to the prospect of a second Trump administration. Since former President Donald Trump gained attention for outperforming Biden in debates and surviving an assassination attempt, this trade has gained momentum. Trump’s previous presidency was marked by policies favorable to business, potentially benefiting sectors like healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group in the event of a second term.
Ed Mills, a Washington policy analyst at Raymond James, noted that while Biden’s exit from the race might prompt a recalibration of market dynamics, they do not foresee immediate changes to their electoral odds, currently at 60% for Trump versus 40% for Biden or another Democratic candidate.