The stock market is set to react tomorrow to the announcement that President Joe Biden will not seek reelection, with expectations of increased volatility.
Medicare patients stand to benefit significantly, potentially saving $1.5 billion on ten common prescription drugs. This decision adds to the mounting economic uncertainty as Democrats scramble to rally around a new candidate. Biden has endorsed Vice President Kamala Harris as his potential successor.
Market analysts predict a turbulent reaction to Biden’s withdrawal. Josh Thompson, CEO of Impact Health USA, expressed to Yahoo Finance that investors favor stability, and a shift of this magnitude could create disruption. This uncertainty may lead investors to seek safer assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic fluctuations.
Additionally, the recent “Trump Trade” might encounter a slowdown. This term pertains to market behaviors driven by investor confidence in a second term for former President Donald Trump. Trump, known for his pro-business stance during his presidency, may spur gains in sectors including healthcare, banking, cryptocurrency, oil stocks, as well as companies like Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, noted that while the electoral odds (60% in favor of Trump and 40% for Biden or a Democrat) would remain unchanged following Biden’s decision, the market may reassess its stance on the “Trump Trade” without showing a broader market reaction.