The stock market is set to react tomorrow to President Joe Biden’s announcement that he will not seek reelection, which is expected to trigger significant volatility.
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This political shift introduces new economic uncertainties as Democrats work to rally around a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, mentioned that Biden’s withdrawal could lead to immediate market fluctuations, stating that investors typically favor stability. The uncertainty could drive investors toward safe-haven assets like gold, silver, and the Swiss franc, which are more resilient during turbulent times.
Additionally, the recent momentum of the “Trump Trade,” which describes market behavior in response to the prospect of a potential second Trump administration, may stall. This trend gained traction after former President Donald Trump’s strong performance in recent debates and his survival of an assassination attempt.
Analysts indicate that a second Trump presidency could positively impact various sectors, including healthcare, banking, cryptocurrency, oil, as well as companies like Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, mentioned that while Biden’s exit could cause the market to reassess its stance, they do not foresee a drastic change in the overall market reaction.