The stock market is set to open tomorrow amid news that President Joe Biden has decided not to seek reelection, which is expected to lead to significant volatility.
A recent study indicates that California’s newly implemented $20 minimum wage for fast food workers has not resulted in job losses. This situation adds further economic uncertainty as Democrats prepare to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, remarked that Biden’s withdrawal from the race would likely spark immediate market fluctuations. Investors typically prefer stability, and such a major political shift would disrupt that predictability.
In response to this uncertainty, investors might turn to safe-haven assets like gold, silver, and the Swiss franc, which are generally less sensitive to political and economic volatility.
Additionally, there may be a slowdown in the so-called “Trump Trade,” which has gained traction following former President Donald Trump’s strong performance in debates and surviving an assassination attempt. This trade describes how market trends shift based on the potential of another Trump presidency. While Trump was known for his pro-business stance during his tenure, stocks in healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group are likely to benefit if he wins again.
Analyst Ed Mills from Raymond James mentioned that even if Biden exits the race, they would not significantly alter their electoral odds, currently standing at 60% for Trump versus 40% for the Democratic nominee. He anticipated that while the market might reassess the race and potentially stall the “Trump trade,” a broader market reaction is not expected.