The stock market is expected to experience volatility with the announcement that President Joe Biden will not seek reelection. This news raises concerns over economic stability as Democrats quickly seek a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, commented that if Biden officially withdraws from the race, it would likely lead to immediate market volatility. He noted that investors typically favor stability and such a major political shift could disrupt that.
This uncertainty may drive investors toward safe-haven assets such as gold, silver, and the Swiss franc, which tend to be more stable during times of political and economic turmoil.
Additionally, there may be a slowdown in the so-called “Trump Trade,” which has gained momentum following former President Donald Trump’s strong debate performance against Biden and a recent assassination attempt. The “Trump Trade” refers to market behaviors influenced by the prospect of a second Trump presidency, benefiting sectors like healthcare, banking, cryptocurrency, oil, and companies such as Tesla and Trump Media and Technology Group.
Ed Mills, a policy analyst at Raymond James, indicated that while a withdrawal by Biden could stall the recent “Trump Trade,” there wouldn’t necessarily be a broader market reaction, maintaining odds at 60% for Trump versus 40% for Biden or a Democratic candidate.