The stock market is set to experience fluctuations tomorrow as news breaks that President Joe Biden will not seek reelection. This announcement is expected to bring a wave of volatility.
Marking a pivotal moment, Biden’s decision signals economic uncertainty as Democrats rally behind a new potential candidate. Biden has already supported Vice President Kamala Harris as his preferred nominee.
Josh Thompson, CEO of Impact Health USA, commented over the weekend that the market is likely to react with volatility and unease if Biden withdraws from the race. He noted that investors typically favor stability, and such a major political shift would create turbulence.
In light of this uncertainty, investors might gravitate toward safe-haven assets, including gold, silver, and the Swiss franc, as they offer more stability amid political and economic upheaval.
Additionally, the ongoing “Trump Trade,” which has gained traction since Donald Trump, the former president and Republican nominee, outperformed Biden in debates and survived an assassination attempt, may experience a slowdown. This term describes market behaviors and investment strategies based around the potential second term of Trump, known for his pro-business policies. Sectors likely to benefit from a second Trump presidency include healthcare, banking, cryptocurrency, oil stocks, and Tesla, along with Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, mentioned that while Biden’s departure could slow down the current “Trump trade,” they do not anticipate an immediate change in electoral odds, which stand at 60% in favor of Trump against 40% for a Democratic candidate.