Biden’s Debate Performance Sparks Market Reactions and Raises Concerns for Democrats

Shares of Trump Media & Technology Group soar as Biden struggles in debate, prompting new concerns within the Democratic Party

In a dramatic post-debate shift, shares of Trump Media & Technology Group (TMTG) surged more than 6% on Friday, following President Joe Biden’s faltering performance against Republican rival Donald Trump at the first 2024 US presidential debate. Biden’s allies are now scrambling to contain the fallout, as concerns grow over his ability to effectively campaign against Trump.

Market Movements Reflect Political Shifts

Shares of TMTG, which owns Trump’s social media platform Truth Social, rose 5.5% to $38.62. This uptick is part of a broader trend where shares of companies associated with Trump saw gains; software developer Phunware, involved in Trump’s 2020 campaign app, climbed 1.6% to $6.40, and conservative video-sharing platform Rumble edged up 1.4% to $5.80.

Despite the speculative nature, the financial markets are reacting to the growing perception that Trump’s chances in the 2024 election are improving. TMTG’s shares have more than doubled this year, reflecting Trump’s rising momentum, although the company faces financial challenges, having reported an adjusted operating loss of $12.1 million in the March quarter.

Debate Fallout: Democratic Concerns and Market Speculation

Biden’s performance at the debate has intensified scrutiny of his age and fitness for office. His attempts to counter Trump’s attacks on issues like the January 6 Capitol insurrection and immigration failed to resonate, leaving many Democrats uneasy. David Axelrod, a senior political commentator and longtime Democratic operative, described the debate as a “DEFCON1” moment for the party.

This unease has translated into the financial markets, where betting markets now reflect an increased likelihood of Trump defeating Biden. The perception that Biden, at age 81, is too old to serve another term has sparked renewed calls for him to step aside, adding to the pressure on his campaign.

Economic and Political Implications

The debate’s aftermath has also impacted related markets. While TMTG saw initial gains, the stock experienced volatility, reflecting broader uncertainties. Trump Media has been notably erratic, with its stock down 41% in the last three months but up 107% year-to-date, despite legal troubles and financial losses. Trump’s ownership of approximately 64.9% of TMTG, valued at about $4.2 billion, underscores the high stakes involved.

For the Democrats, the implications are profound. Biden’s shaky performance has not only raised doubts about his candidacy but also about the party’s strategy moving forward. Some Democratic leaders, like former House Speaker Nancy Pelosi and South Carolina Rep. Jim Clyburn, continue to support Biden, emphasizing his integrity compared to Trump. However, the broader party is grappling with the practicalities of potentially replacing Biden if his campaign falters further.

Looking Ahead

The next few weeks will be critical for Biden’s campaign as it seeks to reassure donors, supporters, and voters of his viability as a candidate. Biden’s advisers are focusing on damage control, emphasizing his experience and ability to lead despite age-related concerns.

As the political landscape shifts, the financial markets will likely continue to reflect the evolving dynamics of the 2024 presidential race. For now, the immediate aftermath of the debate has provided a clear boost to Trump-associated ventures, while casting a shadow of uncertainty over Biden’s campaign and the Democratic Party’s path forward.