The stock market is bracing for a tumultuous opening tomorrow following the news that President Joe Biden has decided not to seek reelection, raising expectations of increased volatility.
In addition to this political development, McDonald’s is now facing its first lawsuit related to the recent E. coli outbreak linked to its Quarter Pounder burgers.
Biden’s decision brings significant economic uncertainty as Democrats quickly rally behind potential new candidates, with Biden endorsing Vice President Kamala Harris as his preferred nominee.
Experts predict that if Biden officially announces his exit from the race, immediate reactions in the market could include volatility and instability. Josh Thompson, CEO of Impact Health USA, stated that investors tend to favor stability, and a major political shift could disturb that preference.
This uncertainty could lead investors to seek safe-haven assets, such as gold, silver, and the Swiss franc, which are more resilient in times of political and economic turmoil.
Furthermore, this announcement may also affect the momentum of the “Trump Trade,” which has been gaining traction after former President Donald Trump outperformed Biden in debates and survived an assassination attempt. The “Trump Trade” reflects market behaviors influenced by the prospect of a second Trump presidency, which is expected to favor sectors like healthcare, banking, cryptocurrency, oil, as well as companies like Tesla and Trump’s own media group.
Ed Mills, a policy analyst at Raymond James, indicated that while the potential exit of Biden could stall the ongoing “Trump Trade” as the market reevaluates the election, he does not anticipate a significant broader market reaction, maintaining current odds of 60% for Trump versus 40% for the Democrat nominee.
Will Gavin contributed to this report.