The stock market is set to open tomorrow amidst speculation that President Joe Biden will not seek reelection, leading to expected volatility.
In related news, McDonald’s is facing its first lawsuit stemming from an E. coli outbreak linked to its Quarter Pounder.
Biden’s potential withdrawal from the race could heighten economic uncertainty, with Democrats rallying around a new candidate; Biden has endorsed Vice President Kamala Harris as a potential nominee.
Market experts predict that if Biden confirms he will not run, the immediate aftermath will likely be characterized by volatility and uncertainty. Josh Thompson, CEO of Impact Health USA, noted that investors tend to favor stability, and a significant political transition could disrupt this preference.
This uncertainty may drive investors toward safe-haven assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic instability.
Additionally, this development could slow the momentum of the “Trump Trade,” which has gained traction since former President Donald Trump’s strong debate performance against Biden and an assassination attempt he survived. This trade refers to investment behaviors influenced by the prospect of a second Trump administration. Throughout his presidency, Trump prioritized business interests, with sectors like healthcare, banking, cryptocurrency, oil, and companies like Tesla expected to benefit from another Trump term.
Ed Mills, a Washington policy analyst at Raymond James, indicated that while the electoral odds may remain at 60% favoring Trump against 40% for Biden or another Democrat, a potential Biden exit could stall the current “Trump trade” as the market reassesses the election landscape, though a broader market reaction is not anticipated.