The stock market is set to open tomorrow amid the announcement that President Joe Biden will not seek reelection, leading to expected volatility.
In a recent poll by Coinbase, Donald Trump and Kamala Harris are reportedly in a tight race for the support of crypto voters. Biden’s decision to withdraw from the race introduces a level of economic uncertainty as Democrats rush to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, noted that Biden’s withdrawal would likely trigger volatility in the markets. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he told Yahoo Finance.
The anticipated uncertainty may drive investors towards safer assets, such as gold, silver, and the Swiss franc, which traditionally perform better during times of political and economic instability.
Another potential outcome could be a slowing of the so-called “Trump Trade,” which has gained momentum following Trump’s strong debate performance and his survival of an assassination attempt. The “Trump Trade” refers to market reactions to the prospect of another Trump administration, which, during his presidency, was favorable to business interests. Sectors expected to benefit if Trump were to reclaim the presidency include healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and Trump Media and Technology Group.
Raymond James Washington policy analyst Ed Mills indicated in a recent note that while Biden’s exit from the race could impact electoral odds—currently estimated at 60% for Trump versus 40% for Biden or other Democrats—he did not foresee a significant broader market reaction at this time.