The stock market is poised for volatility following President Joe Biden’s announcement that he will not seek reelection. This news brings economic uncertainty to the forefront, with Democrats rallying behind new candidates, including Biden’s endorsement of Vice President Kamala Harris as a potential nominee.
Josh Thompson, CEO of Impact Health USA, commented on the situation, stating that such a significant political shift would disrupt market stability. He anticipates that if Biden exits the race, investors will likely flock to safe-haven assets like gold, silver, and the Swiss franc, which tend to perform better in times of political and economic turmoil.
Additionally, there may be a slowdown in what is being called the “Trump Trade,” which has gained traction as former President Donald Trump recently outperformed Biden in a debate and survived an assassination attempt. The “Trump Trade” describes market behavior influenced by the potential for a second Trump administration, with expected beneficiaries including stocks in healthcare, banking, cryptocurrency, oil, Tesla, and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, reflected on the potential impact, noting that while the recent market rally associated with Trump may pause as investors reassess the race, he does not foresee a drastic market reaction.