(Bloomberg) — Markets already had plenty to deal with as summer kicks into full gear, from assessing the Federal Reserve’s rate-cut path to the heart of earnings season. But 2024’s presidential race keeps crowding into the headlines.

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A week after an assassination attempt on Republican Donald Trump shook investors, President Joe Biden said Sunday he will not seek reelection and endorsed Vice President Kamala Harris to become the Democratic nominee.

With Biden’s historic move less than four months from the November election, the political chaos threatens to fuel gyrations on Wall Street, at least in the short term, said market observers. And the so-called Trump Trade recommendation — good for energy companies, banks and Bitcoin, while bad for electric vehicles and renewables — may fray, after gaining momentum after Biden’s disastrous presidential debate.

Here are some early comments from investors:

Wayne Kaufman, chief market analyst at Phoenix Financial Services

I wish we were having less history. Just last week my team was discussing the market implications of an assassination attempt. Whether the buy the dip people come back amid all this uncertainty is questionable. Valuations have been an issue, AI optimism has done a lot to hold up the market, and we’re going into August and September, which have historically been weak months. But in general this has been a historic market.

Julie Biel, portfolio manager and chief market strategist at Kayne Anderson Rudnick

There is now more uncertainty. We just don’t have a lot of precedence for a situation with a candidate who did not go through the normal primary process. So we are once again continuing our very long-term love affair with unprecedented times. And while we might feel like we are getting used to everything but business as usual, this is still a very large spoonful of uncertainty to be swallowing.

Matt Maley, Chief Market Strategist at Miller Tabak + Co.

Trump trades such as Bitcoin, energy will start to unwind and some trades that got hit like solar stocks or EVs can bounce back. But it’s still a lot of uncertainty and markets don’t like that. And we’ll see a big spike in volatility between now and Labor Day and through September.

Yung-Yu Ma, chief investment officer at BMO Wealth Management

The Trump trade is likely to take a breather until it becomes clearer who the Democratic nominee will be. In broad terms, this event injects even more political uncertainty into the markets, which is likely to result in some near-term choppiness.

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The news also rattled currency and bond markets, while money managers in emerging markets expect some of the early “Trump trades” — which included ditching some currencies in Asia and Latin America and buying El Salvador bonds — to be unwound, providing a short term boon to risk assets.

Concern about a strong dollar under a new Trump administration, plus tariffs and a potential landslide win by Republicans have been beginning to weigh on emerging assets, which continue to reel amid the Fed’s uncertain time line to lower interest rates.

Jack McIntyre, portfolio manager at Brandywine Global Investment Management.

The initial reaction is going to be positive for risk assets, including emerging markets. Democrats could take the house now if things worked out. Markets in general want to see more of that as opposed to a sweep by the Republicans.

Jennifer Gorgoll, Portfolio Manager at Neuberger Berman LLC

In the near term, the potential for Fed rate cuts will dominate markets, potentially weakening the dollar and leading to stronger commodities and EM currencies. This, combined with a broader risk on bias associated with the Trump trade, sets up markets for a spectacular 2025, and we believe emerging markets may be a key beneficiary of that.

Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities said:

It’s not entirely clear what it means for the rates market. In the bond market it could lead more to gridlock. Don’t think there is a big trade here in rates as we don’t really know how fiscal policy will shake out. The US Treasury market will still focus on supply, balance sheets, and the economic data. We could get some choppy price action but Fed pricing should remain focused on what’s already in motion.

Barry Knapp, managing partner at Ironsides Partners

Ultimately the uncertainty has gotten a lot higher. Now, what does this mean for how futures will open? That isn’t clear. Bitcoin moved a bit. But we also just had a messy week, which I don’t think has much to do with Trump. I think that’s more about the economy weakening, and the Fed haltingly moving toward a 50 basis point cut in September. Ultimately there’s a lot going on, and this is more uncertainty.

Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors

The immediate impact is to add uncertainty to the Republican sweep narrative that’s been taking hold of markets. Beyond that, it’s all up in the air until we have more clarity on who the Democratic candidate will be.

Art Hogan, chief market strategist at B. Riley Wealth

President Biden dropping out of the race had already started to get priced into the marketplace. The Trump trade, if there actually is one, is indistinguishable from the fact that small caps are being rotated into because of the potential for lower interest rates. The Fed will likely cut in September. The only thing that stands out in the current Trump trade seems to be a bit of a bump in Bitcoin and the rest of the cryptocurrencies as he is seen as more favorable to that asset class.

—With assistance from Julia Leite, Michael Mackenzie, Liz Capo McCormick and Carolina Wilson.

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