The stock market is poised for a turbulent opening tomorrow in response to the news that President Joe Biden will not be seeking reelection. This development is expected to heighten volatility in the markets.
Microsoft has shifted the blame for a recent global IT outage back to Delta Air Lines. The incident has raised questions about accountability in the tech sector, particularly during critical operational times.
The political landscape is set to shift as Democrats hurriedly regroup around a new candidate, with Biden endorsing Vice President Kamala Harris as a potential nominee. This political upheaval could trigger economic uncertainty, according to Josh Thompson, CEO of Impact Health USA. He indicated that if Biden withdraws from the race, the immediate market response would likely be marked by volatility and disruption, as investors generally favor stability.
The potential for increased uncertainty may lead investors to seek refuge in safe-haven assets such as gold, silver, and the Swiss franc, which typically offer more security during turbulent times.
Additionally, the recent momentum of the “Trump Trade,” which has gained traction following Donald Trump’s strong debate performances and recent survival of an assassination attempt, could experience a slowdown. This trade reflects investor sentiment towards a potential second Trump administration, favored for its pro-business policies. Sectors such as healthcare, banking, cryptocurrency, oil stocks, Tesla, and Trump Media and Technology Group are seen as beneficiaries of such an administration.
Despite these changes, Raymond James Washington policy analyst Ed Mills stated that the firm’s electoral odds would remain at 60% for Trump and 40% for a Biden/Democratic nominee, acknowledging that while there might be a stalling effect on the “Trump Trade,” a broader market reaction is not anticipated.