A potential decision by President Joe Biden to drop out of the presidential race could tap the breaks on a shift toward trades that are seen as plays on a Donald Trump victory. NBC News reported on Friday that Biden family members have talked about what a potential exit might look like, citing two people familiar with the discussions. That could be at least a temporary curveball to Wall Street, which has grown increasingly confident in a Trump return to the White House. “Should Biden leave the race, we would not immediately change our electoral odds (60% Trump vs. 40% Biden/Dem). We could see a stalling out of the recent ‘Trump trade’ as the market reassesses the race, but we do not see a broader market reaction,” Raymond James Washington policy analyst Ed Mills said in a note to clients on Thursday evening. Stocks continued their climb following the presidential debate last month, in which Biden struggled. Some have pointed to Trump as a reason for the latest gains, though the increased likelihood of a Federal Reserve rate cut in September is likely also playing a roll. .SPX 1Y mountain Stocks have continued to climb in the summer, including after the June 27 debate. The potential change in the Democratic ticket comes as Trump is seen as the favorite to win in November. Traders in the PredictIt betting market gave the Republican roughly 63% odds to win as of Friday morning. The most recent NBC News poll showed Trump up 3 percentage points nationally on Biden. If Biden is replaced on the ticket, the Democratic Party would need to choose candidates for both president and vice president, and that likely wouldn’t be determined until the party’s convention in August. “Should a Democratic ticket emerge that appears to tilt the race towards a Democratic win and/or sweep, we would likely see a market reaction – especially given the potential policy implications in 2025, with the December 2025 expiration of the Trump-era tax cuts for individuals more likely to expire. However, we would note that the policies of a potential Harris administration would largely align with those of President Biden,” Mills said. Even if Trump is still seen as the favorite to win, a change at the top of the ticket could also impact down-ballot races and control of Congress. “The Senate is currently 51-49 Democratic-controlled, though the election map is very advantageous for the GOP. Should Trump win in a GOP sweep (House & Senate), we suspect he would read that as a MAGA mandate for his American First policies,” TD Cowen analyst Chris Krueger said in a Thursday note. In general, Wall Street views a Trump victory as good for stocks given his calls for lower taxes and less regulation. Some areas of concerns would be in green energy stocks and the impact of his proposed tariff hikes, which some economists predicting that they could lead to higher inflation. “The primary market moves on election night will come through the equity side as a result of significant regulatory policy divergences. Under a Biden win, it will be status quo in markets. With a Trump win, [stocks] will get some serious legs,” Jefferies chief market strategist David Zervos said in a Friday note to clients.