Tomorrow, the stock market will open in light of President Joe Biden’s announcement that he will not seek reelection, leading to expected volatility.
Trump Media has been experiencing a significant decline in its stock performance amid these developments.
Biden’s decision is likely to intensify economic uncertainty as Democrats rally behind a new candidate, with Biden having endorsed Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, stated, “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty. Investors generally prefer stability and predictability, and such a significant political shift would disrupt both.”
This uncertainty may drive investors towards safe-haven assets such as gold, silver, and the Swiss franc, which typically hold steady during political and economic turbulence.
Another potential outcome is a slowdown in the so-called “Trump Trade,” which has gained momentum since Trump outperformed Biden in debates and survived an assassination attempt.
The Trump Trade reflects market behaviors influenced by the prospect of a second Trump administration. Known for his pro-business stance during his presidency, a second term could benefit sectors such as healthcare, banking, cryptocurrency, oil, Tesla, and the Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, noted in a recent communication to CNBC, “Should Biden leave the race, we would not immediately change our electoral odds (60% Trump vs. 40% Biden/Dem). We could see a stalling out of the recent ‘Trump trade’ as the market reassesses the race, but we do not see a broader market reaction.”