The Impact of Kamala Harris Running in the 2024 US Elections on Financial Markets

What could happen in the markets if Kamala Harris becomes the Democratic candidate in the US elections?

The withdrawal of Biden from the race to the White House, although hoped for and now expected by many, has not avoided the surprise effect among analysts and investors, opening up new scenarios for Wall Street and global finances.
It is important to note that although Biden has endorsed Vice President Kamala Harris as the new candidate, the Democrats still need to come together and decide who their chosen and shared name will be to defeat Trump.
However, the plot twist dropped on the US presidential elections is already fueling the debate on what impact the entry of Kamala Harris will have on markets and the economy.
For now, one of the most widely shared points is that new uncertainty and volatility will hit financial assets.
Prepare for further market turbulence as investors try to predict the Democratic candidacy and their chances of beating Trump: this is the summary of some analysts grappling with the first forecasts after Biden’s announcement.

Kamala Harris as a candidate? The markets’ initial reaction is uncertainty

Several experts argue that the exit of the current US president will increase market volatility.
Josh Thompson, CEO of Impact Health USA, stated: “Investors generally prefer stability and predictability, and such a significant political change would disrupt both.”
According to him, the initial response could be a sharp drop in stock prices as investors seek to protect themselves from the potential risks of US political chaos.
Michael Collins, CFA, founder and CEO of WinCap Financial, reiterated the sentiment, stating that increased uncertainty and volatility in the market could occur due to a leadership change.
The withdrawal of Biden from the presidential race could lead investors to dismantle positions that bet on a Republican victory increasing fiscal and inflationary pressures in the United States.
If the Democrats were to maintain one of the chambers of Congress, even if Harris were to lose against Trump, they could let Trump’s tax cuts expire, so this factor will also be taken into consideration, observed analyst and journalist Charles Gasparrino on New York Post.
Depriving the nation of Trump’s economic policies, which involve a reduction in corporate taxes and deregulation, is detrimental to stocks, according to traders.

Harris’s effect on the markets? What could happen

It is not yet certain that Harris will be the new Democratic candidate, but her name is abundant with comments and predictions, especially from a financial perspective.
Charles Myers, founder and CEO of consulting company Signum Global Policy, stated that Harris being the favorite for the Democratic nomination has made the race “completely new.”
Harris has already made history as the first woman and first person of color to be vice president.
If she were to win the Democratic nomination, she would become the second woman to run for president after Hillary Clinton in 2016.
“I think it’s a bit too early for the markets to declare Trump’s victory, and I think she will give him a run for his money,” said Myers.
David Roche, president of Quantum Strategy, highlighted in a Monday morning note that Harris is likely to be backed by the Democratic Party, emphasizing that “changing Harris at this point would be even more chaotic and raise many issues about existing financing for the joint Biden-Harris ticket.”
Roche, however, stated that Harris’s nomination increases Trump’s chances of winning but reduces the odds of Republicans winning both Houses of Congress.
Stephanie Vaughan, co-founder of Veda, suggested that Biden’s withdrawal and the choice of Harris will likely have positive consequences for the US stock market.
“Choosing Kamala Harris would definitely create a situation where Trump would have a greater chance of winning,” she said.
“And Trump is clearly pro-growth and pro-innovation, both of which the American economy urgently needs right now.
Assets, therefore, would almost certainly benefit from it.”

Anything can still happen in the US.
The markets await certainty on who the two real candidates will be running for the 2024 presidential elections.
Now more important than ever.