The stock market is expected to experience notable volatility tomorrow following the announcement that President Joe Biden will not seek reelection. This decision introduces economic uncertainty as Democrats rush to support a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, commented over the weekend that if Biden were to formally withdraw, market reactions would likely be tumultuous. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he stated.
This political 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 turmoil.
Additionally, there could be a slowdown in the so-called “Trump Trade,” a market trend that has gained traction after former President Donald Trump performed strongly in debates and survived an assassination attempt. The Trump Trade describes how investors respond to the prospect of a second Trump presidency. During his previous term, Trump favored business interests, benefiting industries like healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, shared insights with CNBC last week, indicating that while there might be a reassessment of the race, their electoral odds would remain unchanged at 60% in favor of Trump and 40% for Biden or another Democrat.