The stock market is set to react to the announcement that President Joe Biden will not seek reelection, leading to expectations of increased volatility. According to a recent Coinbase poll, Donald Trump and Vice President Kamala Harris are currently tied among crypto voters.
Biden’s decision is likely to heighten economic uncertainty as Democrats begin to rally around a new candidate, with Biden endorsing Harris as his successor.
Josh Thompson, CEO of Impact Health USA, commented that such a significant political change would bring about market volatility. Investors typically favor stability, and this shift could disrupt their expectations.
The uncertainty may lead investors to favor safe-haven assets like gold and silver, as well as currencies such as the Swiss franc that are less affected by political and economic fluctuations.
Additionally, there might be a pause in what is referred to as the “Trump Trade,” which has gained traction since Trump’s strong debate performance and a recent assassination attempt. This term describes market behaviors linked to the anticipated benefits of a potential second Trump administration. During his presidency, Trump supported policies favorable to various sectors, including healthcare, banking, cryptocurrency, and oil, along with companies such as Tesla and the Trump Media and Technology Group.
Raymond James analyst Ed Mills noted that while Biden’s exit from the race might not immediately alter electoral odds, it could cause a temporary stall in the recent “Trump trade” as investors reassess the political landscape. However, he does not foresee a broader market impact.