The stock market is poised for a turbulent opening tomorrow following the announcement that President Joe Biden will not seek reelection. This declaration is expected to spur significant volatility in financial markets.
Josh Thompson, the CEO of Impact Health USA, indicated that Biden’s withdrawal would likely lead to immediate market reactions characterized by uncertainty. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he stated.
In light of this uncertainty, investors may gravitate toward safe-haven assets like gold, silver, and the Swiss franc, which are typically less affected by political and economic fluctuations.
There is also the potential for a slowdown in the so-called “Trump Trade,” which has gained traction in recent weeks. This trade reflects investor behavior in response to the prospect of a second Trump administration, particularly following Trump’s debate performance against Biden and his survival of an assassination attempt. A second Trump presidency is anticipated to favor sectors such as healthcare, banking, cryptocurrency, oil stocks, Tesla, and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, noted that while a Biden exit could alter market dynamics, he does not foresee a significant overarching market reaction. “We would not immediately change our electoral odds (60% Trump vs. 40% Biden/Dem). We could see a stalling out of the recent ‘Trump trade’ as the market reassesses the race,” he mentioned in a note to CNBC last week.