The stock market is set to experience notable volatility tomorrow following the announcement that President Joe Biden will not seek reelection. This shift in the political landscape is expected to heighten economic uncertainty as the Democratic Party rallies behind a new candidate, with Biden reportedly endorsing Vice President Kamala Harris for the nomination.
Market experts are predicting that if Biden officially declares his withdrawal, investors may react to the instability by turning to safe-haven assets such as gold, silver, and the Swiss franc, which typically perform better during times of political and economic uncertainty.
Additionally, there may be a slowdown in the so-called “Trump Trade,” which has gained traction as former President Donald Trump has recently outperformed Biden in a debate and endured an assassination attempt. The Trump Trade reflects market behaviors tied to prospects of a second Trump presidency, which favored business interests during his previous term. Sectors expected to benefit from a potential Trump-led administration include healthcare, banking, cryptocurrency, oil, and companies like Tesla and Trump Media and Technology Group.
Analysts like Ed Mills from Raymond James suggest that while Biden’s exit may prompt a reassessment of electoral odds, they do not foresee an immediate broad market reaction.