The stock market is set to experience significant fluctuations tomorrow following the news that President Joe Biden will not seek reelection. This decision raises concerns about economic uncertainty as Democrats rally behind a new candidate, with Biden endorsing Vice President Kamala Harris as his successor.
Experts predict that the market’s immediate response will be volatile. Josh Thompson, CEO of Impact Health USA, commented that investors typically favor stability, and such a major political change could disrupt that preference. As a result, investors may turn to safe-haven assets such as gold, silver, and the Swiss franc, which are known to be less sensitive to political and economic instability.
Additionally, there may be a slowdown in the “Trump Trade,” which has gained momentum since Donald Trump outperformed Biden in a debate and survived an assassination attempt. The term “Trump Trade” refers to market behaviors influenced by the prospect of another Trump administration. Trump’s previous presidency was seen as favorable for business interests, with industries like healthcare, banking, cryptocurrency, oil, and companies such as Tesla poised to benefit from his potential return.
Ed Mills, a Washington policy analyst at Raymond James, indicated that while a withdrawal by Biden could disrupt recent trading trends, it may not lead to a significant broader market reaction, maintaining current electoral odds at 60% for Trump and 40% for Biden or another Democrat.