Thus, President Joe Biden’s unexpected decision to refuse a second term ignited the financial markets’ reactions. This has resulted in a series of surprises, which have left investors trying to reposition and speculate on possibilities that may affect the political and economic systems.
It has shaken the campaign for the 2024 elections, and following Trump’s return to office, it is a new ball game. Some investors, who assumed themselves correctly for Trump’s triumph, are now preparing for more uncertainty and fluctuations as the routes become less defined.
The so-called Trump trade of buying proponents’ products and supporting strategies will reverse. Traders also focus on the second quarter earnings report and the squabbles over Federal Reserve policy.
Within the first few minutes after Biden’s announcement, the dollar was slightly lower, treasury yields softer, and US equity futures slightly higher.
Specifically, based on the upcoming events of the next several months, highlighting the fight for the Democratic party’s nomination and the presidential election itself, investors should prepare for an increase in the respective options’ volatility.
