Tomorrow, the stock market will react to President Joe Biden’s announcement that he will not seek reelection, leading to anticipated volatility.
Following Nvidia’s recent earnings report, major tech companies are ramping up their investments in artificial intelligence, spurred on by strategic insights from industry experts.
This political development is likely to heighten economic uncertainty as Democrats quickly rally around a new candidate, with Biden endorsing Vice President Kamala Harris as the potential nominee.
Josh Thompson, CEO of Impact Health USA, commented over the weekend that the announcement of Biden withdrawing could trigger immediate market volatility and uncertainty. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he stated.
In response to this turbulence, investors may opt for safe-haven assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic fluctuations.
There is also a chance that the “Trump Trade,” which has gained momentum since Donald Trump’s strong debate performance against Biden and his recent survival of an assassination attempt, may lose traction. This trade reflects market reactions based on the prospects of another Trump administration. Trump, known for his business-friendly policies during his presidency, has been seen as beneficial for sectors including healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group.
Raymond James’ Washington policy analyst Ed Mills noted that while Biden’s departure could stall the recent momentum of the “Trump Trade” as the market reassesses the political landscape, they do not foresee a broader market reaction, maintaining electoral odds at 60% for Trump versus 40% for Biden or a Democratic candidate.