Tomorrow’s stock market opening is expected to be influenced by the announcement that President Joe Biden will not seek reelection, with volatility likely on the horizon.
In another significant development, McDonald’s is facing its first lawsuit linked to the E. coli outbreak associated with its Quarter Pounder.
As Democrats scramble to unify behind a new candidate, with Biden endorsing Vice President Kamala Harris, economic uncertainty is expected to become a pressing issue.
Josh Thompson, CEO of Impact Health USA, stated, “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty. Investors generally prefer stability and predictability, and such a significant political shift would disrupt both.”
This uncertainty may lead investors to seek refuge in safe-haven assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic instability.
There is also a chance that momentum for the so-called “Trump Trade,” which has gained traction following former President Donald Trump’s strong debate performance against Biden and subsequent survival of an assassination attempt, could stall. The Trump Trade reflects market behavior in response to the prospect of a second Trump administration. During his presidency, Trump was regarded as favorable to business interests, and certain sectors, including healthcare, banking, cryptocurrency, oil stocks, Tesla, and Trump Media and Technology Group, are anticipated to benefit from a potential second term.
Analyst Ed Mills from Raymond James noted, “Should Biden leave the race, 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, but we do not foresee a broader market reaction.”