The stock market is poised for a volatile opening tomorrow following the announcement that President Joe Biden will not seek reelection. This decision sets the stage for economic uncertainty as Democrats scramble to back a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Market strategist Josh Thompson, CEO of Impact Health USA, stated that Biden’s exit from the race would likely trigger immediate market volatility due to investors’ preference for stability. This political shift may drive investors toward safe-haven assets such as gold, silver, and the Swiss franc, which tend to perform better in times of uncertainty.
Additionally, the anticipated “Trump Trade,” which has been gaining traction since former President Donald Trump’s strong debate performance and survival of an assassination attempt, may face a slowdown. This trade reflects how investor sentiment fluctuates in response to the possibility of a second Trump administration, which is seen as favorable for various sectors, including healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst with Raymond James, mentioned that while the electoral odds may not be immediately altered (60% Trump vs. 40% Biden/Dem), the market could reassess its stance on the “Trump Trade” in light of Biden’s announcement, although no broader market reaction is expected.