The stock market is poised for a turbulent opening tomorrow, following the announcement that President Joe Biden will not seek reelection, leading to heightened volatility.
Nvidia’s stock is experiencing one of its most unstable weeks to date amid this news. Biden’s decision introduces a wave of economic uncertainty as Democrats scramble to rally behind a new candidate, with Biden having endorsed Vice President Kamala Harris as the potential nominee.
Financial experts have pointed out that if Biden officially steps back from the race, the market is likely to respond with uncertainty and volatility. Josh Thompson, CEO of Impact Health USA, explained that investors typically prefer a stable environment, and such a major political change would disrupt that stability.
This uncertainty may drive investors toward safe-haven assets such as gold, silver, and the Swiss franc, which are generally considered more resilient during periods of political and economic turmoil.
Additionally, the “Trump Trade,” which has gained momentum since former President Donald Trump outperformed Biden in a debate and survived an assassination attempt, could face a slowdown. The Trump Trade encompasses market behaviors influenced by the prospect of Trump returning to the White House, benefiting sectors like healthcare, banking, cryptocurrency, oil, and companies like Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, noted that while there might be a stall in the recent Trump-related market activities as investors reassess the political landscape, they do not anticipate a significant broader market reaction.