The stock market is set to open tomorrow amidst news of President Joe Biden’s decision not to seek reelection, creating a climate of anticipated volatility. This announcement could heighten economic uncertainty as Democrats scramble to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris as a potential nominee.
Josh Thompson, CEO of Impact Health USA, shared insights on the potential market reaction, stating that if Biden were to withdraw from the race, the immediate response would likely be marked by volatility and uncertainty. Investors typically favor stability, and such a significant political shift could disrupt this balance.
As uncertainty looms, investors might gravitate towards safer assets such as gold, silver, and the Swiss franc, which are generally less influenced by political and economic fluctuations.
There is also speculation about the impact on the “Trump Trade,” which has gained momentum following former President Donald Trump’s strong debate performance and recent assassination attempt survival. The “Trump Trade” refers to market dynamics and investor behavior in anticipation of another Trump administration, as Trump was perceived as favorable to business during his presidency. Key sectors likely to benefit from a second Trump term include healthcare, banking, cryptocurrency, oil, Tesla, and the Trump Media and Technology Group.
Ed Mills, a policy analyst at Raymond James, noted that while a Biden withdrawal could lead to a reassessment of electoral odds—currently seen as 60% favoring Trump versus 40% for Biden/Democrats—the firm does not expect a significant broader market reaction at this stage.