Political Flux

Kamala Harris’s Unexpected Entrance Into the 2024 Presidential Race Is Shaking Up Markets — And Volatility

By Noah Weidner
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The last few weeks have shown that America didn’t just fall out of a coconut tree but exists in the context of all in which it lives and what came before it. Because of that, prediction markets and Wall Street were positioning for a second Donald Trump presidency — with President Joe Biden viewed as a long shot after several high-profile missteps. But this weekend, everything changed.

Kamala-mentum: On Sunday, Joe Biden announced he would not seek reelection — and endorsed Vice President Kamala Harris to run in his place. With dozens of high-profile endorsements and over $100M raised, Harris secured the delegates needed to clinch the nomination. Although it’s still early, this surprising shift is making many investors reconsider the Trump trade, which was already en vogue before Biden’s withdrawal.

  • The first crop of Trump vs. Harris political polls have shown Trump’s popular margin evaporating, with recent polls putting the candidates in a virtual tie.
  • Harris’s appeal among women, Black voters, and young people benefits her campaign — but her differing views from Biden on key issues are also significant.

Coconut-Pilled

For now, investors seem to be staying aboard the Trump Train, with Ritholtz’s Callie Cox noting that “either there’s too much uncertainty or markets don’t think this changes the outcome very much.” With a new Democrat on the ticket, the real problem for investors is calculating what priorities would be top-of-mind in a Harris presidency.

  • A Democrat victory would be seen as positive for renewables, EVs, and international stocks — while pharmaceuticals, oil and gas, and banks might suffer.
  • Harris is expected to embrace many successful policies from her VP term — including reshoring industries, promoting sustainable energy, and advancing chipmaking.

Volatility advisory: With only 103 days until the presidential election, investors have little time to predict the future. Despite prediction markets like Polymarket still favoring Trump, the path to Election Day may be rocky. Bloomberg suggests that the Democrats’ late change is likely to bring volatility to the markets — with safe-havens like treasuries, gold, and Bitcoin all rising as Harris enters the race.