The stock market is set for a notable shift as President Joe Biden’s potential decision to not seek reelection is expected to create volatility. This political maneuvering comes at a time when economic uncertainties are emerging, with Democrats gathering behind the possibility of endorsing Vice President Kamala Harris as their candidate.
Investment expert Josh Thompson, CEO of Impact Health USA, indicated that a withdrawal by President Biden would likely trigger a turbulent market response. “Investors typically favor stability and predictability, and such a significant political change would disrupt both,” he stated, emphasizing the likely shift towards safe-haven assets such as gold, silver, and the Swiss franc, which tend to perform better in uncertain times.
The anticipated news could also cause a slowdown in the so-called “Trump Trade,” which has gained traction following former President Donald Trump’s strong debate performances and his survival of an assassination attempt. This trading strategy reflects the market’s responsiveness to the potential of a second Trump administration, which is believed to favor sectors like healthcare, banking, cryptocurrency, and oil, as well as companies like Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, noted that while they might not change their electoral odds, the market could stall as it reassesses the political landscape. Currently, the odds stand at 60% for Trump and 40% for Biden or another Democratic nominee.