The stock market is set to react strongly tomorrow following President Joe Biden’s announcement that he will not seek reelection, creating a climate of volatility and uncertainty.
Recent polling from Coinbase indicates that Donald Trump and Kamala Harris are tightly competing for the support of crypto voters. As the Democratic Party scrambles to rally behind a new candidate, Biden has expressed his endorsement for Vice President Harris as the nominee.
Market analysts, including Josh Thompson, CEO of Impact Health USA, suggest that the political shift could lead to fluctuations in the market. “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty,” he noted. Investors typically favor stability, and such a notable political change could disrupt that.
This environment of uncertainty may encourage investors to turn to safe-haven assets such as gold, silver, and the Swiss franc, which are generally seen as more stable during times of political and economic turmoil.
Furthermore, there is speculation about the potential slowing of the “Trump Trade,” which has gained momentum following Trump’s strong debate performance and a recent assassination attempt against him. The Trump Trade refers to how the market responds to the possibility of a second Trump administration, which previously saw substantial benefits for sectors including healthcare, banking, cryptocurrency, and oil stocks, as well as companies like Tesla and Trump Media and Technology Group.
Raymond James analyst Ed Mills mentioned that while the dynamics may change, they do not foresee an immediate alteration in the electoral odds, currently estimated at 60% favoring Trump versus 40% for Biden or another Democrat. He indicated that while there could be a pause in the Trump Trade as markets reevaluate the election landscape, a major market reaction is not anticipated.