The stock market is anticipated to open tomorrow amidst speculation that President Joe Biden will not seek reelection, which is expected to create significant volatility.
In related news, McDonald’s is facing its first lawsuit connected to the recent E. coli outbreak linked to its Quarter Pounder. This legal action could further complicate the fast-food giant’s public relations and financial standing as the market reacts to the broader political landscape.
Biden’s potential decision not to run again could elevate economic uncertainty while Democrats scramble to support an alternative candidate, following Biden’s endorsement of Vice President Kamala Harris as the nominee.
Josh Thompson, CEO of Impact Health USA, commented on the potential impact of Biden’s announcement, noting, “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 lead investors to gravitate towards safe-haven assets like gold, silver, and the Swiss franc, which tend to be more stable during political and economic upheavals.
Moreover, the so-called “Trump Trade,” which has gained momentum since former President Donald Trump’s strong debate performance against Biden and his recent assassination attempt, could face a halt. The Trump Trade refers to market behaviors reflecting investors’ reactions to the prospects of a second Trump administration. Under Trump, several sectors such as healthcare, banking, cryptocurrency, oil, and companies like Tesla and Trump Media and Technology Group flourished.
Ed Mills, a Washington policy analyst for Raymond James, indicated that while Biden’s withdrawal would not immediately shift current electoral odds (forecasting 60% for Trump against 40% for Biden or another Democrat), the market might pause on the recent trends associated with Trump’s potential return, although he does not foresee a widespread market reaction.