The stock market is poised for a turbulent opening tomorrow following news that President Joe Biden will not seek reelection, leading to expected volatility.
Nvidia is currently experiencing one of its most challenging weeks in the stock market.
The announcement is set to bring economic uncertainty into focus as Democrats scramble to rally behind a new candidate, reportedly with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, commented that the market is likely to react with volatility and uncertainty if Biden confirms his exit from the race. He noted that investors typically favor stability, and such a major political change could disrupt that equilibrium.
This uncertainty may drive investors toward safer assets like gold, silver, and the Swiss franc, which tend to be less affected by political and economic fluctuations.
Additionally, there could be a slowdown in the “Trump Trade,” which has gained momentum since former President Donald Trump performed strongly in a recent debate against Biden and survived an attempted assassination.
The “Trump Trade” describes market behaviors and trading patterns in anticipation of a second Trump administration. During his presidency, Trump, a former real estate developer, was notably supportive of business interests. Sectors likely to benefit from another Trump presidency include healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and the Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, stated that even if Biden steps aside, they would not immediately adjust their electoral odds, currently standing at 60% for Trump and 40% for Biden or a Democrat nominee. Mills suggested that while there may be a pause in the recent “Trump trade” as the market reassesses the political landscape, a significant broader market response is not anticipated.