The stock market is set to react tomorrow to the announcement that President Joe Biden will not seek reelection, which is expected to bring significant volatility.
Trump Media, in particular, is facing a difficult period as it experiences a notable decline in stock performance. This announcement from the President signals potential economic uncertainty as Democrats quickly rally around a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, expressed that such a development would likely lead to an immediate reaction in the markets characterized by instability and unpredictability. Investors typically favor stable environments, and the shift in political landscape could disrupt that stability.
As a result of this uncertainty, investors might turn to safe-haven assets like gold, silver, and the Swiss franc, which tend to be less affected by volatile economic conditions.
Additionally, there is speculation regarding the potential slowdown of the “Trump Trade,” which has gained traction following Donald Trump’s strong debate performances and his survival of an assassination attempt. The “Trump Trade” refers to market dynamics as investors respond to the prospects of another Trump presidency, which historically favored business sectors, including healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and the Trump Media and Technology Group.
Analyst Ed Mills from Raymond James noted that while a Biden withdrawal could lead to reassessment of the electoral landscape, he does not anticipate a dramatic broader market reaction just yet, maintaining current electoral odds at 60% for Trump versus 40% for Biden or another Democrat.