The stock market is set to open tomorrow amid anticipated volatility following President Joe Biden’s announcement that he will not seek reelection. This decision is likely to heighten economic uncertainty as Democrats quickly rally behind a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, indicated that Biden’s withdrawal could trigger significant market volatility. He noted, “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both.”
This climate of uncertainty might lead investors to seek safe-haven assets, such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic turmoil.
Additionally, this development may stall the momentum of the so-called “Trump Trade,” which gained traction after former President Donald Trump outperformed Biden in a recent debate and survived an assassination attempt. This trade reflects market behavior influenced by the prospect of a second Trump administration, which is anticipated to benefit sectors such as healthcare, banking, cryptocurrency, and oil, as well as companies like Tesla and Trump Media and Technology Group.
Raymond James policy analyst Ed Mills stated that while Biden’s exit could pause the recent Trump Trade, he does not foresee a widespread market reaction. The current electoral odds remain at 60% for Trump and 40% for Biden or another Democratic candidate.