The stock market is set to react tomorrow to the announcement that President Joe Biden will not seek reelection, an event likely to introduce significant volatility. This decision brings with it economic uncertainty as Democrats rush to rally behind a potential new candidate, with Biden endorsing Vice President Kamala Harris as his preferred successor.
Josh Thompson, CEO of Impact Health USA, expressed in an interview that if Biden steps back from the race, the market would likely experience immediate fluctuations. He emphasized that investors favor stability and predictability, and a major political change would disturb that balance.
Amid such uncertainty, investors might gravitate towards safe-haven assets such as gold, silver, and the Swiss franc, known for their relative stability during turbulent times.
Additionally, there may be a slowdown in the so-called “Trump Trade,” which has gained traction since former President Donald Trump outperformed Biden in a recent debate and survived an assassination attempt. This term describes market behaviors influenced by the anticipation of a second Trump administration, which is perceived to benefit sectors like healthcare, banking, cryptocurrency, and oil, along with companies such as Tesla and Trump’s media ventures.
Ed Mills, a policy analyst with Raymond James, noted that while a Biden exit could lead to a reevaluation of electoral odds—currently estimated at 60% for Trump to 40% for a Biden/Democratic nominee—he does not foresee an extensive impact on the broader market.