The stock market is poised for a tumultuous opening tomorrow following the announcement that President Joe Biden will not seek reelection, which is expected to create significant volatility.
Trump Media is currently facing a prolonged decline in its stock performance. This announcement has raised concerns about economic uncertainty, prompting Democrats to rally behind a potential new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, commented on the situation: “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty. Investors generally prefer stability and predictability, and such a significant political shift would disrupt both.”
The anticipated uncertainty might lead investors to seek refuge in safer assets, such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic instability.
There is also a chance that the momentum behind the “Trump Trade” could stall. This term refers to market behaviors influenced by expectations surrounding a potential second term for Donald Trump, who has gained attention for his performance in debates and recent events. Trump, known for his real estate background, was considered business-friendly during his presidency, with certain sectors, including healthcare, banking, cryptocurrency, and oil, expected to benefit from his policies.
Ed Mills, a Washington policy analyst for Raymond James, noted, “Should Biden leave the race, we would not immediately change our electoral odds (60% Trump vs. 40% Biden/Dem). While we might see a pause in the recent ‘Trump trade’ as the market reassesses the race, we do not anticipate a broader market reaction.”