The stock market is set to open tomorrow amid speculation following President Joe Biden’s announcement that he will not seek reelection, a decision expected to trigger significant volatility.
In addition to this political shift, McDonald’s is facing its first lawsuit linked to the E. coli outbreak associated with its Quarter Pounder.
With Biden’s withdrawal, economic uncertainty could become a central concern as Democrats rally behind a new candidate, likely Vice President Kamala Harris who has received Biden’s endorsement.
Market analysts predict that if Biden officially withdraws, investors will react with apprehension. Josh Thompson, CEO of Impact Health USA, indicated that such a shift would likely unsettle markets, as investors favor stability. This uncertainty might lead them to seek refuge in safe-haven assets such as gold, silver, and currencies like the Swiss franc, which are typically more resilient in times of political and economic turbulence.
Additionally, the so-called “Trump Trade,” which has gained momentum since Donald Trump debated Biden and survived an assassination attempt, could experience a slowdown. This trading strategy reflects investor behavior in anticipation of a potential second Trump administration, which many believe would favor sectors including healthcare, banking, cryptocurrency, oil stocks, and companies such as Tesla and Trump Media and Technology Group.
Despite the anticipated market adjustments, analysts like Ed Mills from Raymond James suggest that a withdrawal from the race by Biden wouldn’t significantly alter the electoral odds (currently estimated at 60% for Trump versus 40% for Biden or another Democrat). While a reassessment of the race may occur, broader market impacts are not expected to be drastic.