Investors are closely watching how President Biden’s withdrawal from the presidential race will impact financial markets.
With Biden slipping in polls post-debate, “Trump trades” surged, anticipating a Republican win. This shift could spark market volatility as traders adjust their strategies.
Late Sunday, S&P 500 futures rose slightly, a notable move after a tough week for U.S. stocks. Treasury bond yields and the dollar remained steady, although the dollar has recently weakened due to Trump’s criticism, shared by his running mate, Senator J.D. Vance.
Gold prices, a haven during market volatility, rose, hitting a record last week. Bitcoin, benefiting from Trump’s pro-crypto stance, jumped over 1% following Biden’s announcement.
Asian markets mostly fell on Monday amid U.S. political turmoil and China’s economic policy update. Taiwan’s stock index dropped sharply, influenced by Trump’s claims about the semiconductor business. Japan’s Nikkei 225 also fell slightly, with analysts noting that Trump and Vance’s preference for a weak dollar could hurt Japanese stocks.
“Trump’s economic policies might lead to a weaker dollar and lower global stock prices,” wrote Takahide Kiuchi of Nomura Research Institute, cautioning that the short-term market direction remains uncertain as traders reassess Trump’s victory odds with the new Democratic ticket.
