The stock market is poised for a tumultuous opening tomorrow following the announcement that President Joe Biden will not seek reelection, prompting predictions of increased volatility.
As Democrats scramble to rally behind a new candidate, economic uncertainty is expected to take center stage. Biden has endorsed Vice President Kamala Harris as the potential nominee.
Josh Thompson, CEO of Impact Health USA, commented on the situation, stating that Biden’s decision would likely lead to immediate market fluctuations. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he said.
This political uncertainty may steer investors towards safer assets, such as gold, silver, and the Swiss franc, which tend to be more resilient in times of instability.
Additionally, there is speculation that the recent “Trump Trade” could lose momentum. This term describes the market’s behavior in response to the possibility of a second Trump administration. Former President Donald Trump, who has been portrayed positively in recent debates and has survived a notable assassination attempt, has historically fostered a business-friendly environment. Stocks in healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group could be poised to benefit if he were to return to power.
However, Raymond James Washington policy analyst Ed Mills shared insight last week, indicating that Biden’s exit might not lead to immediate changes in electoral odds, currently estimated at 60% for Trump and 40% for Biden or a Democratic contender. Mills suggested that while the market may reassess the dynamics of the race, a broader market reaction is unlikely.