The stock market is set for a turbulent opening tomorrow following the announcement that President Joe Biden will not seek reelection. The news is expected to introduce significant volatility, with economic uncertainty taking center stage as Democrats rally around a new candidate. Biden has already endorsed Vice President Kamala Harris as the prospective nominee.
Market experts are predicting that the immediate response to Biden’s withdrawal may lead to fluctuations and unpredictable movements in stock prices. Josh Thompson, CEO of Impact Health USA, stated that investors typically favor stability, and such a drastic political change could disrupt the existing market dynamics.
In light of this uncertainty, some investors may shift their focus to safe-haven assets, including gold, silver, and the Swiss franc, which tend to be less affected by political and economic instability.
Additionally, there is a chance that the so-called “Trump Trade,” which surged after former President Donald Trump outperformed Biden in a debate and survived an assassination attempt, may stall. This term refers to market behaviors in anticipation of Trump’s potential return to the presidency. Under Trump’s administration, business interests thrived, benefiting sectors such as healthcare, banking, cryptocurrency, oil, and notable companies like Tesla, along with Trump Media and Technology Group.
However, analysts caution that even if Biden exits the race, it may not lead to a significant shift in electoral odds. Raymond James policy analyst Ed Mills remarked that, while there could be a pause in the “Trump Trade,” they do not foresee a major broader market reaction.