Strategist: Biden's withdrawal may bring volatility, but interest rate cut expectations remain the main driver

Lindsay James, investment strategist at Quilter Investors, said the withdrawal of US President Joe Biden from the US presidential race and his endorsement of Kamala-Harris has made a Trump victory less likely, and there could be some volatility in the market over the next four months. However, she wrote in a research note that expectations of rate cuts will remain a driver of market returns compared to campaign news. She added that the market is increasingly pricing in a Trump victory, with small companies partially buoyed by expectations of widespread import tariffs.