The stock market is poised for a turbulent opening tomorrow in response to President Joe Biden’s announcement that he will not seek reelection, which is expected to heighten economic uncertainty.
This decision could create a flurry of activity as Democrats quickly pivot to support a new candidate, with Biden endorsing Vice President Kamala Harris as his preferred successor.
Market experts predict that a withdrawal by President Biden would lead to immediate volatility. Josh Thompson, CEO of Impact Health USA, remarked that investors typically favor stability, and such a significant political change would disrupt the status quo.
This uncertainty could drive investors towards safe-haven assets, such as gold, silver, and the Swiss franc, which tend to perform better during periods of political and economic turmoil.
Another possible outcome is a slowdown in the “Trump Trade,” which has gained momentum after former president Donald Trump’s performance in a recent debate and his survival of an assassination attempt.
The “Trump Trade” describes how market behaviors are influenced by the potential of a second Trump administration. Trump, known for his pro-business policies during his presidency, is expected to have positive effects on sectors like healthcare, banking, cryptocurrency, and oil, as well as companies such as Tesla and the Trump Media and Technology Group.
Ed Mills, a policy analyst at Raymond James, mentioned that while a change in the presidential race could stall the recent “Trump Trade,” he does not anticipate a significant broader market impact at this time.