The stock market is poised for a tumultuous opening tomorrow, following the announcement that President Joe Biden will not seek reelection. This decision is likely to intensify economic uncertainty as Democrats scramble to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris as the prospective nominee.
Josh Thompson, CEO of Impact Health USA, noted that such a significant political shift would likely lead to market volatility. “Investors generally prefer stability and predictability, and Biden’s withdrawal from the race would disrupt both,” he remarked.
In light of this uncertainty, investors may gravitate towards safer assets, such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic fluctuations.
Additionally, the so-called “Trump Trade” could experience a slowdown. This term describes the market’s reaction to the potential of a second Trump administration, particularly in sectors like healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group, all of which benefited during his previous presidency.
Ed Mills, a policy analyst at Raymond James, conveyed that while Biden’s exit might lead to a temporary halt in the momentum of the “Trump Trade,” he does not anticipate a significant broader market reaction. He maintains the electoral odds at 60% for Trump versus 40% for a Democratic candidate despite the developments.