The stock market is set to open tomorrow amidst the news that President Joe Biden will not seek reelection, leading to anticipated volatility.
A recent Coinbase poll indicates that Donald Trump and Kamala Harris are in a tight race for support among cryptocurrency voters. Biden’s decision to step aside introduces economic uncertainty as Democrats scramble to rally behind a new candidate, with Biden reportedly endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, noted that if Biden formally announces his withdrawal from the race, the immediate market reaction is likely to be marked by volatility. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” Thompson told Yahoo Finance.
This uncertainty could drive investors toward safer assets like gold, silver, and the Swiss franc, which typically fare better in times of political and economic instability.
Additionally, this development may halt the momentum of what is termed the “Trump Trade.” This market phenomenon has gained traction since Trump outperformed Biden in a debate and survived an assassination attempt. The “Trump Trade” reflects market behaviors influenced by the speculation of a second Trump administration, which is thought to benefit sectors such as healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla, as well as Trump Media and Technology Group.
Despite the potential for volatility, Raymond James Washington policy analyst Ed Mills suggested that the electoral odds would remain unchanged at 60% for Trump and 40% for either Biden or a Democrat, although the market might reassess its stance on the “Trump Trade” following Biden’s decision.