The stock market is anticipated to experience volatility when it opens tomorrow amid the news that President Joe Biden will not seek reelection. This decision is expected to heighten economic uncertainty as Democrats rally behind a new candidate, with Biden endorsing Vice President Kamala Harris.
Josh Thompson, CEO of Impact Health USA, commented that the market is likely to react with instability and uncertainty to Biden’s withdrawal from the race, as investors typically favor predictable environments, and such a significant political change could disrupt that stability.
In this climate of uncertainty, investors may turn to safe-haven assets like gold, silver, and the Swiss franc, which tend to be more resilient during times of political and economic unrest.
Additionally, there is a possibility that the momentum behind the “Trump Trade,” which has gained traction following former President Donald Trump’s debate performances against Biden and his recent survival of an assassination attempt, could stall. The “Trump Trade” pertains to how investors respond to the prospect of another Trump administration, as he was perceived as pro-business during his presidency, benefiting sectors like healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, stated that despite potential market fluctuations, they do not plan to immediately adjust their electoral odds, currently estimating a 60% chance for Trump against a combined 40% for Biden and the Democrats. Mills noted that while a reevaluation of the political landscape could momentarily stall the “Trump trade,” he does not foresee a significant effect on the broader market.