The stock market is set to experience significant fluctuations tomorrow following the news that President Joe Biden will not seek reelection. This development is expected to create economic uncertainty as Democrats quickly rally around a new candidate, with Biden having endorsed Vice President Kamala Harris as a potential nominee.
Josh Thompson, CEO of Impact Health USA, noted that if Biden officially announces his decision, the stock market would likely react with volatility and uncertainty. He emphasized that investors typically prefer stability and predictability, creating a disruptive atmosphere with such a major political shift.
In light of this uncertainty, investors may redirect their focus towards safe-haven assets such as gold, silver, and the Swiss franc, which tend to be more stable during political and economic instability.
Additionally, experts anticipate a potential slowdown in what has been termed the “Trump Trade.” This refers to market behavior influenced by expectations surrounding a second Trump administration, particularly after Donald Trump’s strong performance in recent debates and his survival of an assassination attempt. During his presidency, Trump was seen as pro-business, benefiting sectors like healthcare, banking, cryptocurrency, and oil, along with companies like Tesla and Trump Media and Technology Group.
However, Raymond James Washington policy analyst Ed Mills indicated that while a Biden exit from the race could stall the “Trump Trade,” he does not foresee a significant overall market reaction right away, maintaining a current electoral odds assessment of 60% for Trump versus 40% for Biden or other Democrats.