On July 18, according to CALFIN News (Editor: Xiaoxiang), the US stock and bond markets both experienced selling pressure under the influence of frequent rumors about whether Biden will withdraw. The Dow Jones Industrial Average fell more than 500 points, ending the index's six consecutive trading days of gains. In the bond market, the "Trump deal" overwhelmed the "interest rate cut deal" overnight, pushing US bond yields higher again.

Biden's condition is good according to his advisers, after testing positive for COVID-19 the day before. Currently, Biden has no fever and his vital signs remain normal, and he will continue to work.

However, despite this, Biden's campaign is still facing challenges. On Thursday evening, before Trump's nomination speech as the Republican presidential candidate, the political discussion in the overnight market mainly focused on whether Biden will withdraw and when and how he will withdraw.

Local media reported on Thursday morning that senior Democrats believed that pressure from party members and confidants could convince Biden to withdraw from the race as early as this weekend. Senate Majority Leader Schumer had already told Biden that ending the campaign would be more advantageous for the Democratic Party. House Minority Leader Jeffries also told Biden that he was hurting the party's campaign in Congress.

The biggest blow so far has come from Obama. According to The Washington Post, the former US president told his allies that Biden's chances of winning have shrunk considerably and that he believes Biden needs to seriously consider the feasibility of continuing to run.

According to sources, Biden is still planning his scheduled campaign trip next week. However, the president is more willing to listen to calls to withdraw than before and has asked for polling on Vice President Harris's chances against Trump.

The betting market appears to be more convinced than ever before that Biden will not be the Democratic Party's nominee to take on former President Trump in November. As of Thursday afternoon, the main prediction platform Polymarket estimates that the probability of Biden becoming the Democratic Party's official nominee is only 14%, while PredictIt believes that the probability is 23%. This is the lowest probability that Biden has received a nomination since these two platforms began allowing bets on the US election.

At the same time, Vice President Harris is the most likely to be the Democratic Party's official nominee on both political betting platforms, with probabilities of 62% and 64%, respectively.

Tim Williams, public relations director of BetUS, also said: "Our odds correctly predicted Pence would be chosen as Trump's running mate, and I believe our odds will correctly predict this Democratic presidential candidate - be ready to see Harris become the Democratic nominee."

Against the backdrop of various rumors surrounding Biden's "withdrawal," the overnight US financial markets have been in constant turmoil, with panic selling spreading to almost all assets. In the end, the Nasdaq and the S&P 500 both fell more than 1%, the Dow Jones fell more than 530 points, and small-cap stocks also fell nearly 2%. The CBOE market volatility index, usually referred to as the "fear index," touched its highest level since early May.

Tim Ghriskey, senior investment portfolio strategist at Ingalls & Snyder, said that unlike yesterday, you really saw money going into other sectors, and today there was a widespread sell-off.

Ghriskey added that in the past two weeks we have seen money rotate into other sectors, including mid-caps and small caps, which have been lagging behind in performance, but today the situation has reversed and money is wandering around trying to find direction. Investors are starting to withdraw, saying 'we're going to cash out now, this has been a good rally'. They are uncertain about what will happen politically next."

In the US bond market, despite data on Thursday showing that initial jobless claims in the US rose again, making people more believe that the Federal Reserve may start cutting interest rates in September. Nonetheless, the "Trump deal" still overwhelmed the "interest rate cut deal" overnight, bringing bond market selling pressure and pushing US bond yields generally higher.

At the end of the New York session, US bond yields collectively rose, with the 2-year US Treasury yield up 3.4 basis points to 4.48%, the 3-year US Treasury yield up 3.9 basis points to 4.248%, the 5-year US Treasury yield up 4.1 basis points to 4.124%, the 10-year US Treasury yield up 4.3 basis points to 4.205%, and the 30-year US Treasury yield up 4.5 basis points to 4.422%.

Of course, the only thing that remains unchanged is the steep yield curve. The difference between the 2-year and 10-year Treasury bond yields was a negative 27 basis points overnight, and the degree of inverted curve eased by 1 basis point again. Betting on the steep yield curve has always been a popular trade, as people expect that as the Federal Reserve gets closer to cutting interest rates, the decline in short-term Treasury yields will be faster than that of long-term Treasury yields.

The logic of the "Trump trade" is that if Trump's election victory leads to a rise in inflation and an increase in the fiscal deficit, it will also increase selling pressure on long-term bonds.

Editor / jayden