The stock market is poised for volatility as President Joe Biden has announced he will not seek reelection, a move that is likely to intensify economic uncertainty. This development comes as Democrats rally behind a new candidate, with Biden endorsing Vice President Kamala Harris to step into the nomination.
Josh Thompson, CEO of Impact Health USA, expressed that a Biden withdrawal would trigger immediate market fluctuations. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he noted in a conversation with Yahoo Finance.
In light of this uncertainty, investors may turn towards safe-haven assets such as gold, silver, and the Swiss franc, which are traditionally less affected by political and economic turmoil.
Additionally, the momentum of what is known as the “Trump Trade” might experience a slowdown. This term describes the market’s reaction to the prospect of a second Trump administration, particularly following his performance in recent debates and a personal crisis. Analysts predict that sectors including healthcare, banking, cryptocurrency, and oil, alongside companies like Tesla and Trump Media and Technology Group, could benefit from Trump’s return to political prominence.
Ed Mills, a Washington policy analyst for Raymond James, indicated that while a Biden exit may not immediately alter electoral odds—currently standing at 60% for Trump versus 40% for Biden or another Democrat—there might be a temporary stall in the Trump Trade as the market reevaluates the electoral landscape.