The stock market is set to open tomorrow amid the news that President Joe Biden will not be seeking reelection, which is expected to create volatility.
A recent study suggests that California’s new $20 minimum wage for fast food workers has not resulted in job losses. This decision could lead to economic uncertainty as Democrats rush to rally around a new candidate, with Biden endorsing Vice President Kamala Harris as a potential nominee.
According to Josh Thompson, CEO of Impact Health USA, if President Biden announces his withdrawal from the race, the market is likely to react with volatility and uncertainty. Investors typically favor stability, and a major political shift could disrupt that.
This uncertainty may lead investors to flock to safe-haven assets such as gold, silver, and the Swiss franc, which are less affected by political and economic fluctuations.
There is also the potential for the “Trump Trade” to stall, a trend that has gained momentum since former President Donald Trump outperformed Biden in debates and survived an assassination attempt. The “Trump Trade” reflects how investor behavior shifts in response to the prospect of a second Trump administration. Businesses such as healthcare, banking, cryptocurrency, and oil stocks, along with Tesla and Trump Media and Technology Group, are seen as key beneficiaries of a second Trump presidency.
Raymond James policy analyst Ed Mills noted that while Biden’s withdrawal could impact electoral odds, currently estimated at 60% for Trump and 40% for Biden or another Democratic candidate, he does not foresee a significant overall market reaction immediately following such an announcement.