The stock market is set to experience significant volatility tomorrow following the announcement that President Joe Biden will not seek reelection. This development brings economic uncertainty to the forefront as Democrats work to rally behind a new candidate, with Biden endorsing Vice President Kamala Harris for the nomination.
Josh Thompson, CEO of Impact Health USA, indicated that Biden’s decision could lead to immediate market fluctuations. He noted that investors typically favor stability, and a major political shift of this nature could disrupt the existing equilibrium.
In light of this uncertainty, investors may gravitate towards safe-haven assets such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic instability.
Additionally, the market might see a slowdown in the so-called “Trump Trade,” a phenomenon that has gained traction since the former president, Donald Trump, performed well in the recent debate and survived an assassination attempt. The “Trump Trade” reflects investor behavior linked to the potential for a second Trump administration, benefiting sectors like healthcare, banking, cryptocurrency, oil stocks, and companies such as Tesla and Trump Media and Technology Group.
Ed Mills, a Washington policy analyst at Raymond James, stated that while a Biden withdrawal could stall the recent “Trump Trade,” he does not expect a significant broad market reaction at this time.