The stock market is poised for a notable opening tomorrow following the announcement that President Joe Biden will not seek reelection, which is expected to result in increased volatility.
As the political landscape shifts, Democrats are quickly rallying support behind a new candidate, with Biden endorsing Vice President Kamala Harris as a potential nominee.
Market analyst Josh Thompson, CEO of Impact Health USA, commented on the situation, stating that an announcement regarding Biden’s withdrawal would likely lead to a tumultuous market reaction. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he noted.
In times of uncertainty, investors may gravitate towards safe-haven assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic upheaval.
Additionally, there could be a slowdown in the so-called “Trump Trade,” a market trend that has been gaining momentum since Donald Trump, the former president and Republican nominee, outperformed Biden in a debate and survived an assassination attempt. This trade reflects investor behavior based on the potential for a second Trump administration, which, during his presidency, favored business interests, particularly in sectors like healthcare, banking, cryptocurrency, oil, and companies like Tesla and Trump Media and Technology Group.
Raymond James Washington policy analyst Ed Mills indicated that while Biden’s exit from the race might cause a reevaluation of the recent “Trump trade,” it would not likely produce a significant broader market reaction. Current electoral odds are still evaluated at 60% for Trump and 40% for Biden or a Democratic candidate.