The stock market is poised for potential volatility tomorrow following the announcement that President Joe Biden will not seek reelection. This announcement introduces a wave of economic uncertainty as Democrats rally to identify a new candidate, with Biden endorsing Vice President Kamala Harris as his preferred nominee.
Josh Thompson, CEO of Impact Health USA, noted that the market’s immediate reaction to Biden’s exit from the race is likely to be one marked by unpredictability. He emphasized that investors typically favor stability, and such a major political shift could disrupt that stability.
In the face of this uncertainty, investors might gravitate toward safe-haven assets like gold, silver, and the Swiss franc, which tend to be more stable during times of political and economic turmoil.
The situation may also impact the “Trump Trade,” a phenomenon that has gained traction following former President Donald Trump’s strong performance in a recent debate and his survival of an assassination attempt. The Trump Trade encompasses how the market responds to the potential of a second Trump administration, particularly benefiting sectors such as healthcare, banks, cryptocurrency, oil stocks, and companies like Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, indicated that while Biden’s departure could lead to a reevaluation of the electoral landscape, with a projected 60% chance of Trump securing the nomination versus 40% for Biden or another Democrat, he does not anticipate a significant reaction from the broader market.