The stock market is poised for a tumultuous opening tomorrow following news that President Joe Biden will not seek reelection, leading to anticipated volatility.
In a significant development, Boeing is aiming to raise $19 billion as it encounters challenges including delivery delays and worker stoppages. This move underscores the economic uncertainty looming ahead as Democrats scramble to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, expressed concerns about the market’s potential reaction. He stated, “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 lead investors to seek safe-haven assets such as gold, silver, and the Swiss franc, which typically perform better in times of political and economic instability.
Additionally, there could be a slowdown in the so-called “Trump Trade,” which has gained traction since former president Donald Trump’s strong debate performance against Biden and his survival of an assassination attempt. The Trump Trade reflects how market behavior changes in anticipation of a potential second Trump administration, particularly benefiting sectors like healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and Trump Media and Technology Group.
Ed Mills, a policy analyst at Raymond James, noted that while the immediate odds may not shift drastically—currently estimated at 60% for Trump versus 40% for Biden or a Democrat—there could be a reassessment impacting the recent Trump trade, but without a significant broader market disruption.