The stock market is set to experience notable volatility with the anticipated announcement that President Joe Biden will not seek reelection. This development brings economic uncertainty to the forefront as Democrats aim to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris as the leading nominee.
Market experts predict that if Biden officially withdraws from the race, investors could react with uncertainty and volatility. Josh Thompson, CEO of Impact Health USA, shared insights, stating that investors typically favor stability, and such a political shift could disrupt market dynamics.
In light of this uncertainty, investors may gravitate toward safe-haven assets like gold, silver, and the Swiss franc, which tend to weather political and economic instability better.
Moreover, this situation could lead to a pause in the “Trump Trade.” This term refers to market behavior linked to expectations of a second Trump administration, particularly after the former president’s performance in recent debates and an unprecedented assassination attempt. Historically, Trump has been perceived as favorable to business, benefiting sectors including healthcare, banking, cryptocurrency, oil, and companies such as Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, commented that while the electoral odds might remain unchanged (60% for Trump versus 40% for a Democrat), there could be a temporary stall in the “Trump Trade” as the market recalibrates in response to the evolving political landscape.