The stock market is set to face volatility tomorrow following President Joe Biden’s announcement that he will not seek reelection. This development is expected to heighten economic uncertainty as Democrats look to unite behind a new candidate, with Biden endorsing Vice President Kamala Harris as his choice for the nomination.
According to Josh Thompson, CEO of Impact Health USA, the market will likely react with instability in response to Biden’s withdrawal from the race. Investors typically favor stability, and such a major political change could disrupt the market’s predictable trends.
In light of this uncertainty, investors may shift their focus towards safe-haven assets, such as gold, silver, and the Swiss franc, which are known to be less affected by political and economic turmoil.
Additionally, the ongoing “Trump Trade,” which has gained momentum since Donald Trump’s recent performance in a debate and his survival of an assassination attempt, may also experience a slowdown. This term refers to market behaviors tied to the prospects of a second Trump administration. Trump, known for his pro-business policies during his presidency, could see industries like healthcare, banking, cryptocurrency, oil, and companies like Tesla benefit should he return to office.
Raymond James policy analyst Ed Mills stated that although Biden’s exit may cause the market to reassess the race, they do not anticipate major changes to their electoral odds of 60% favoring Trump over 40% for Biden or another Democrat.