The stock market is set to react tomorrow to the announcement that President Joe Biden will not seek reelection, ushering in a period of anticipated volatility.
Medicare patients stand to save $1.5 billion on ten prescription drugs under new regulations. This economic shift is expected to elevate concerns as Democrats rally around a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, commented that Biden’s decision to withdraw could trigger an immediate market response characterized by volatility and uncertainty. He noted that investors tend to favor stability, and such a major political change could disrupt market dynamics.
This uncertainty may prompt investors to flock to safe-haven assets such as gold, silver, and the Swiss franc, which tend to remain stable amid political and economic upheaval.
Additionally, the momentum behind the “Trump Trade,” which has been gaining traction since Donald Trump’s recent performance against Biden and a personal assassination attempt, could stall. The Trump Trade represents market behaviors influenced by the prospect of a second Trump administration, which previously favored business interests during his presidency. Key sectors that could benefit from another Trump term include healthcare, banking, cryptocurrency, oil, and companies like Tesla and Trump Media and Technology Group.
Despite these developments, Raymond James Washington policy analyst Ed Mills indicated that the firm’s electoral odds (60% for Trump versus 40% for Biden/Democrats) would remain unchanged in the immediate aftermath. Mills suggested that while the recent momentum of the “Trump Trade” could stall, a wider market reaction is not anticipated.