Investors React to Election Upheaval, Reassessing Their Political Bets

Investors around the world are trying to gauge how President Biden’s decision to drop out of the presidential race will affect stocks, bonds, the dollar and other markets.

As Mr. Biden slipped in the polls after his debate performance, so-called “Trump trades” gained prominence as investors prepared for a Republican win. A new Democratic ticket could alter investors’ perceived election odds, with many expecting increased volatility as traders reconsider their strategies.

In after-hours trading late Sunday night, futures for the S&P 500 index rose slightly. Trading can be thin before the official market open, but the move, while small, is notable coming after one of the worst weeks for the U.S. stock market this year.

Treasury bond yields and the dollar were little changed. The dollar has slipped recently, in part because of comments former President Donald J. Trump has made criticizing a stronger dollar, which makes it harder for U.S. manufacturers to sell abroad. (A view shared by his running mate, Senator J.D. Vance.)

The price of gold rose. Gold, which often serves as a haven for investors during bouts of market volatility and dollar weakness, hit a record last week.

Bitcoin, which has rallied on polls showing a lead for Mr. Trump, who has courted crypto companies with promises to end a regulatory crackdown, jumped more than 1 percent after Mr. Biden’s announcement.

Markets in Asia were mostly down early Monday. Along with the political upheaval in the United States, investors were digesting an economic policy announcement from China’s leaders. Stocks in Shanghai and Shenzhen slipped in early trading on Monday.

Taiwan’s main stock index dropped sharply on Monday. Taiwan, which plays a central role in the global semiconductor