The stock market is poised for a change tomorrow following the announcement that President Joe Biden will not seek reelection, likely leading to increased volatility.
Analysts are recommending investments in Costco and American Express as inflation rates begin to cool.
The decision by Biden, who has endorsed Vice President Kamala Harris as his successor, places economic uncertainty at the forefront as Democrats scramble to unify behind a new candidate.
Josh Thompson, CEO of Impact Health USA, remarked that Biden’s withdrawal could trigger immediate market volatility. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he noted.
This uncertainty may drive investors towards safer assets like gold, silver, and the Swiss franc, which tend to be less affected by political and economic upheavals.
Additionally, there may be a slowdown in what is referred to as the “Trump Trade.” This term describes market behavior driven by the prospect of another Trump presidency, particularly following his recent debate performances against Biden and surviving an assassination attempt.
Historically, this trade has favored sectors such as healthcare, banking, cryptocurrencies, oil stocks, Tesla, and Trump Media and Technology Group.
Analyst Ed Mills from Raymond James mentioned that if Biden were to exit the race, there might be a pause in the “Trump Trade” as investors reassess the political landscape, but he does not anticipate a broader market downturn.