The stock market is poised for a tumultuous opening tomorrow following the announcement that President Joe Biden will not seek reelection, leading to anticipated volatility. This development will heighten economic uncertainty as Democrats quickly rally to support a new candidate, with Biden endorsing Vice President Kamala Harris as the nominee.
Market analysts believe that Biden’s potential withdrawal would trigger uncertainty among investors, prompting a likely shift toward safe-haven assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic fluctuations.
Another aspect to consider is the possible slowdown of the “Trump Trade,” which has gained traction since former President Donald Trump outshone Biden in a recent debate and survived an assassination attempt. The “Trump Trade” encapsulates the trading trends influenced by expectations surrounding a second Trump term. During his presidency, Trump was considered business-friendly, benefiting sectors such as healthcare, banking, cryptocurrency, oil stocks, and even Tesla.
According to Ed Mills, a policy analyst at Raymond James, despite the potential changes, they do not anticipate an immediate shift in the electoral odds, which are currently assessed at 60% in favor of Trump versus 40% for Biden or a Democrat. Mills noted that while the recent momentum in the “Trump Trade” might stall as investors reevaluate the political landscape, they do not foresee a significant overall market reaction.