The stock market is poised for an eventful opening tomorrow following President Joe Biden’s announcement that he will not seek reelection, a move that is expected to introduce significant volatility.
In a recent Coinbase poll, Donald Trump and Kamala Harris are reported to be in a tight competition for crypto voter support.
This decision by Biden could lead to economic instability, prompting Democrats to quickly rally behind a new candidate, with Biden endorsing Vice President Kamala Harris as the preferred nominee.
Josh Thompson, CEO of Impact Health USA, commented on the potential market impact, stating, “If President Biden were to announce his withdrawal from the reelection race, the immediate market reaction would likely be one of volatility and uncertainty. Investors generally prefer stability and predictability, and such a significant political shift would disrupt both.”
This political uncertainty may drive investors toward safer assets like gold, silver, and the Swiss franc, which tend to be less affected by market volatility.
Additionally, the so-called “Trump Trade,” a term used to describe investor behaviors associated with expectations of a second Trump term, may see a slowdown. Since outperforming Biden in a debate and surviving an assassination attempt, the Trump Trade has gained traction. Notably, sectors such as healthcare, banking, cryptocurrency, oil stocks, and companies like Tesla and Trump Media and Technology Group are anticipated to benefit from a Trump presidency.
Ed Mills, a policy analyst at Raymond James, noted, “Should Biden leave the race, we would not immediately change our electoral odds (60% Trump vs. 40% Biden/Dem). We could see a stalling out of the recent ‘Trump trade’ as the market reassesses the race, but we do not see a broader market reaction.”