The stock market is set to experience turbulence tomorrow following the announcement that President Joe Biden will not seek reelection.
According to a recent Coinbase poll, former President Donald Trump and current Vice President Kamala Harris are in a tight competition for the support of crypto voters.
This development introduces significant economic uncertainty as Democrats work to rally behind an alternative candidate, with Biden reportedly endorsing Harris to carry the party’s nomination.
Josh Thompson, CEO of Impact Health USA, highlighted the potential for market volatility in reaction to Biden’s withdrawal. He noted that investors typically favor stability, and such a major political change could lead to disruptions.
Amid this uncertainty, investors might gravitate toward so-called safe-haven assets, such as gold, silver, and the Swiss franc, which tend to be less influenced by political or economic turmoil.
Additionally, the potential shift could disrupt the “Trump Trade,” a market trend that has gained momentum since Trump’s strong debate performance against Biden and a recent assassination attempt against him.
The Trump Trade reflects how market behavior changes in anticipation of a possible second Trump administration. As a former real estate mogul, Trump’s presidency was marked by a favorable environment for business interests. Stocks in sectors like healthcare, banking, cryptocurrency, and oil, along with Tesla and Trump Media and Technology Group, are expected to benefit should he return to office.
Ed Mills, a policy analyst at Raymond James, stated that despite Biden’s exit from the race, there would not be an immediate change in electoral odds (60% Trump vs. 40% Biden/Dem). Mills suggested that while the recent ‘Trump trade’ might see a pause as the market reassesses the political landscape, a significant broader market response is not anticipated.