The stock market is anticipated to open tomorrow amid news that President Joe Biden will not seek reelection, leading to expected volatility.
This development is likely to heighten economic uncertainty as Democrats quickly rally behind a new candidate, with Biden reportedly endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, indicated that an announcement from President Biden regarding his withdrawal could result in immediate market reactions characterized by volatility and uncertainty. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he stated.
In light of this uncertainty, investors may turn to safe-haven assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic turmoil.
Additionally, the momentum of the “Trump Trade,” which has gained traction since former President Donald Trump performed well in a debate against Biden and survived an assassination attempt, could face a slowdown. This term refers to market behaviors and trading patterns in response to the possibility of a second Trump administration. A Trump presidency is seen as beneficial for sectors such as healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and Trump Media and Technology Group.
Raymond James Washington policy analyst Ed Mills stated that while a Biden exit from the race may lead to reassessment of the electoral odds—currently at 60% for Trump and 40% for Biden or a Democrat—he does not anticipate a significant broader market reaction.