The stock market is poised for a turbulent session tomorrow following news that President Joe Biden will not seek reelection, leading to anticipated volatility.
This week has been particularly challenging for Nvidia shares, which are facing significant fluctuations. Biden’s decision brings economic uncertainty to the forefront, prompting Democrats to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris as the next nominee.
Josh Thompson, CEO of Impact Health USA, commented over the weekend, “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty. Investors generally prefer stability and predictability, and such a significant political shift would disrupt both.”
In light of this uncertainty, investors may gravitate towards safe-haven assets like gold, silver, and the Swiss franc, which tend to be less affected by political and economic instability.
Additionally, the anticipated “Trump Trade” could lose momentum. This trade represents market behavior influenced by the prospect of a second Trump administration, particularly after former President Donald Trump outperformed Biden in a debate and survived an assassination attempt. Trump, known for his business-friendly policies during his presidency, has been a favored figure for sectors such as healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla, as well as the Trump Media and Technology Group.
Raymond James Washington policy analyst Ed Mills indicated in a recent note to CNBC that while market reassessment might occur with Biden’s withdrawal, they do not foresee a significant immediate impact on broader market conditions.