The stock market is set to react tomorrow following the announcement that President Joe Biden will not be seeking reelection, leading to anticipated volatility.
A survey has revealed that most Americans do not consider a million dollars to be sufficient to feel wealthy. This decision raises concerns about economic stability as Democrats move to support a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, stated over the weekend that Biden’s withdrawal would likely trigger immediate market volatility. He emphasized that investors typically favor stability, and such a major political shift would create disruption.
This uncertainty could lead investors to flock to safe-haven assets such as gold, silver, and the Swiss franc, which are generally less affected by political and economic instability.
Another potential impact could be a slowdown in the “Trump Trade,” which has gained momentum since former President Donald Trump outperformed Biden in recent debates and survived an assassination attempt. This term describes the market’s behavior and investor trading patterns in anticipation of a Trump second term. Trump, known for his pro-business policies during his presidency, is expected to favor stocks in healthcare, banking, cryptocurrency, oil, Tesla, and his own Trump Media and Technology Group if he wins.
Ed Mills, a Washington policy analyst at Raymond James, commented that even if Biden exits the race, the electoral odds would remain at 60% for Trump versus 40% for Biden or another Democrat. He noted the possibility of the Trump trade stalling as the market reevaluates the political landscape but does not foresee a significant overall market reaction.