The stock market is expected to see increased volatility tomorrow following the news that President Joe Biden will not seek reelection. This decision may heighten economic uncertainty as Democrats move to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris as the potential nominee.
Experts predict that if Biden officially announces his exit from the race, the market will react with instability. Josh Thompson, CEO of Impact Health USA, remarked that investors typically favor stability and predictability, and such a major political shift will upset that balance.
This uncertainty could lead investors to shift their focus toward safe-haven assets, such as gold, silver, and the Swiss franc, which tend to be less impacted by political and economic turmoil.
Additionally, the market may experience a slowdown in the so-called “Trump Trade.” This term describes trading behaviors linked to the prospects of a second Trump administration, particularly following the former president’s notable debate performances against Biden and his recent assassination attempt survival.
Analysts have indicated that should Biden withdraw from the election, there may be hesitation in the “Trump Trade” as market participants reassess the political landscape. Raymond James Washington policy analyst Ed Mills stated that the firm’s electoral calculations would remain unchanged with a 60% chance for Trump compared to 40% for Biden or another Democratic candidate, while expecting a more contained market reaction.