The stock market is set to react tomorrow to the news that President Joe Biden will not seek reelection, with volatility expected.
In related news, Medicare patients stand to save $1.5 billion on ten prescription drugs. This shift in Biden’s political strategy could introduce significant economic uncertainty as Democrats rally to support a new candidate, with Biden endorsing Vice President Kamala Harris as his preferred successor.
Josh Thompson, CEO of Impact Health USA, commented that if Biden announces his withdrawal from the race, the market will likely experience immediate volatility and uncertainty. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he stated.
This uncertainty might lead investors to seek safe-haven assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic turbulence.
Another outcome could be a slowdown in the “Trump Trade,” which has gained momentum following former President Donald Trump’s performance in recent debates and surviving an assassination attempt. The Trump Trade reflects the market behavior and investor trading patterns in anticipation of a potential second Trump administration. Trump, known for his past business-friendly policies, could offer benefits to sectors such as healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla, as well as Trump Media and Technology Group.
Ed Mills, a policy analyst at Raymond James, noted that while the electoral odds remain at 60% for Trump and 40% for Biden or a Democrat, Biden’s departure could lead to a reassessment of the race. However, he does not foresee a broader market reaction.