The stock market is poised for a tumultuous opening tomorrow in light of President Joe Biden’s announcement that he will not seek reelection, an event that is expected to create significant volatility.
Trump Media’s stock has been underperforming, continuing a downward trend. The shift in political landscape could exacerbate economic uncertainties as Democrats rush to back a new candidate; Biden has endorsed Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, shared his insights, stating that, “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty.” He noted that investors typically favor stability and predictability, and a major political change would disrupt that balance.
This uncertainty may lead investors to gravitate towards “safe-haven” assets such as gold, silver, and the Swiss franc, which tend to be more stable amid political and economic turmoil.
Another potential outcome is the slowdown of the so-called “Trump Trade,” a phenomenon that gained traction after Donald Trump, the former president and current Republican nominee, outperformed Biden in a debate and survived an assassination attempt.
The “Trump Trade” describes how market behaviors shift in response to the possibility of another Trump administration. As a previous real estate magnate with a business-friendly presidency, Trump is seen as advantageous for sectors such as healthcare, banking, cryptocurrency, oil, and companies like Tesla and the Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, mentioned that while Biden’s exit from the race could disrupt recent trading patterns related to Trump, he does not anticipate a broader market impact. Mills assessed the electoral odds as remaining at 60% for Trump versus 40% for Biden or other Democrats.