The stock market is expected to react tomorrow following the announcement that President Joe Biden will not seek reelection, leading to anticipated volatility.
This announcement brings economic uncertainty to the surface as Democrats work quickly to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris as the nominee.
Josh Thompson, CEO of Impact Health USA, indicated that a decision by Biden to withdraw from the race would likely trigger immediate market volatility. “Investors generally favor stability and predictability, and such a significant political development would disrupt both,” he remarked.
The resulting uncertainty may drive investors toward safe-haven assets like gold, silver, and the Swiss franc, which tend to remain stable amid political and economic unrest.
Additionally, there is potential for a slowdown in the “Trump Trade,” which has gained traction since former President Donald Trump, the Republican presidential nominee, performed well in a debate against Biden and faced an assassination attempt.
The “Trump Trade” reflects market behaviors influenced by the prospect of a second Trump administration. During his presidency, Trump was known for supporting business interests, which benefited sectors such as healthcare, banking, cryptocurrencies, oil stocks, Tesla, and Trump Media and Technology Group.
Ed Mills, a policy analyst at Raymond James, stated that while an immediate electoral odds adjustment is not expected if Biden exits the race—currently seen as 60% Trump to 40% Biden/Dem—investors may reassess the political landscape, potentially causing a temporary halt in the “Trump Trade,” without significant broader market repercussions.