The stock market is poised for volatility tomorrow following President Joe Biden’s announcement that he will not seek reelection. This news is expected to create economic uncertainty as Democrats quickly rally around a new candidate, with Biden endorsing Vice President Kamala Harris as the nominee.
Market experts predict an immediate wave of uncertainty and fluctuations in response to Biden’s decision. Josh Thompson, CEO of Impact Health USA, explained that investors favor stability, and such a notable political shift could disrupt that.
This uncertainty may lead investors to seek refuge in safe-haven assets, such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic turmoil.
Additionally, there may be a slowdown in the “Trump Trade,” a market trend that has gained momentum following Donald Trump’s strong debate performances and recent survival of an assassination attempt. This trade reflects how investors react to the prospect of a second Trump presidency, with industries like healthcare, banking, cryptocurrency, and oil, along with Tesla and Trump Media and Technology Group, expected to benefit.
Despite the potential changes, Ed Mills, a policy analyst with Raymond James, noted that the electoral odds would remain largely unchanged, predicting a 60% chance of Trump winning versus a 40% chance for Biden or another Democrat. He indicated that while the “Trump trade” may stall as the market reassesses the political landscape, he does not foresee a significant market downturn as a result.