The stock market is poised for a potentially volatile day tomorrow following the announcement that President Joe Biden will not seek reelection. The news has led to increased concerns about economic uncertainty, as Democrats quickly rally around a new candidate, with Biden endorsing Vice President Kamala Harris as his successor.
Josh Thompson, CEO of Impact Health USA, indicated that if Biden’s exit from the race is confirmed, investors are likely to react with unease. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he noted in an interview.
This climate of uncertainty may drive investors toward safer assets such as gold, silver, and the Swiss franc, which are typically less affected by political and economic instability.
Additionally, the anticipated “Trump Trade,” which has been gaining momentum since Donald Trump’s strong debate performance against Biden and his survival of an assassination attempt, may experience a pause. This trade reflects market reactions to the possibility of Trump’s return to the presidency. Trump’s business-friendly policies during his previous term led to significant gains for companies in sectors such as healthcare, banking, cryptocurrency, and oil, along with firms like Tesla and the Trump Media and Technology Group.
Raymond James Washington policy analyst Ed Mills remarked that while there may be a temporary halt in the recent “Trump trade” as the market recalibrates, he does not foresee a wide-ranging market impact. He noted that their electoral odds remain at 60% for Trump and 40% for Biden or other Democratic candidates.