Financial markets are jittery after the unexpected announcement of President Joe Biden ending his reelection campaign and endorsing Vice President Kamala Harris.

In an extraordinary decision that upends an already dramatic race for the White House, Biden, said in a written statement Sunday that it was the “greatest honour” to serve but his withdrawal was “in the best interest of my party and the country”.

The announcement caps a tumultuous period in US politics, which began with his disastrous debate against Donald Trump in June. Biden says he will remain president until January.

This has thrown a new variable into the 2024 election equation, putting markets on edge.

With Biden stepping down, the primary question looming over investors is whether to continue betting on the ‘Trump Trade’.

The term Trump Trade refers to the market behaviors and trends that emerged during Trump’s presidency, driven by his administration’s looser fiscal policies, deregulation, higher tariffs and infrastructure spending.

The impact of these policies on the markets included a rising dollar, higher bond yields, specific sectors like banking, healthcare, energy, and industrials seeing gains due to deregulation and anticipated infrastructure projects, and Bitcoin seeing increased interest.

Now, as Vice President Harris steps into the spotlight, the markets are set to experience heightened uncertainty.

The immediate challenge for investors is to ascertain whether Harris can quickly consolidate her party’s support, secure the Democratic nomination, and mount a formidable campaign against Trump.

If Harris can gain significant traction and pose a credible threat to Trump’s lead in the polls, market volatility is expected to persist.

Investors will likely remain on tenterhooks, closely monitoring the political landscape and adjusting their portfolios to hedge against potential risks.

This sustained volatility would be a reflection of the uncertainty surrounding Harris’s ability to compete effectively against Trump.

The key for investors will be to remain agile, diversifying their portfolios to mitigate risks and capitalize on opportunities as they arise.

Those with a higher risk tolerance will look to exploit the volatility by making tactical trades based on the latest political developments.

Biden’s decision to step down and endorse Harris has set the stage for a tumultuous period in the markets.

Whether Harris can mount a successful campaign against Trump, or whether Trump will solidify his lead, will be the critical factors determining the extent and duration of this market volatility.

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London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.