On Sunday local time, Biden withdrew from the 2024 presidential race and immediately announced his support for Vice President Harris to take his place.

Investors expect that the Harris administration will defend the economic policies implemented during Biden's presidency, including subsidies for electric cars and green energy projects in the Inflation Reduction Act, increasing funding for the IRS to track down wealthy tax evaders, imposing a consumption tax on share buybacks, and implementing a minimum corporate tax rate of 15% on large companies.

"In substance, Harris's potential presidency will be an extension of the Biden administration," said Isaac Boltansky, director of policy research at BTIG. He added that "from a democratic perspective, I think this is more of a feature than a flaw," and concerns about Biden's leadership are "not because of his policies, but because of his health and ability."

Even in the scenario where Harris defeats Trump in November, analysts believe that the Republican Party is likely to regain control of the Senate and thereby limit Harris's ability to sign legislation with partisan overtones.

She will immediately face negotiations over the 2017 tax cuts, which temporarily lowered individual income tax rates and increased child tax credits. Biden promised to extend these tax cuts to families with incomes under $400,000 per year, and analysts believe Harris may adopt a similar stance.

"If Democrats win, but with Republicans controlling at least one chamber of Congress, investors should expect greater fiscal restraint compared to a Trump victory or full Democratic sweep," said Henrietta Treyz, director of economic policy at Veda Partners.

This scenario could lead to a deadlock in negotiations over the deficit and debt ceiling, similar to the standoff between the White House and Congress during the Obama administration.

Negotiations over the extension of Bush-era tax cuts lasted for years, and Congress threatened not to raise the debt ceiling, leading to the longest government shutdown in US history and ultimately prompting rating agency Standard & Poor's to downgrade US debt ratings.

Of course, it remains to be seen whether the Democratic National Convention next month will officially nominate Harris, a decision that will be made by more than 4,000 delegates who will be responsible for formally nominating a candidate next month.

However, Harris is seen by analysts as the overwhelming favorite to win the nomination.

Stifel's chief Washington strategist, Brian Gardner, said,"Given time and logistical constraints, anyone other than Harris will struggle to organize and raise funds for a campaign."

"Ms. Harris may inherit Biden's campaign resources, including campaign funds," he added. "In addition, we expect the Congressional Black Caucus to support Harris, and other Democrats will struggle to match these advantages."

Harris has no long-term record on economic policy, as she has spent most of her public career as a prosecutor, but her brief tenure as a senator and her 2020 presidential campaign may reveal her views.

As California Attorney General, she secured 25 billion dollars in settlements for homeowners wrongly denied the right of redemption after the financial crisis and withdrew from national negotiations that would have given residents of other states less compensation. She also pushed for the passage of the Homeowner Bill of Rights in California, which solidified her position as a consumer advocate in the run-up to the 2020 election.

Harris is also concerned about the plight of low-income and middle-class renters. During her presidential campaign, she proposed tax breaks for families who spend more than 30% of their income on rent and utility bills, which would come in the form of monthly checks.

Harris's long-standing ties to large tech companies are also an important factor in her resume. As an old-school San Francisco politician, she has established close ties with major tech companies such as Meta(formerly Facebook) and Alphabet, Google's parent company, which was seen as a disadvantage during the 2020 Democratic primaries, but could be good news for tech investors if she wins the presidency.

In addition, Harris is seen as a stronger opponent of the oil industry than Biden. During her 2019 presidential campaign, Harris emphasized her battle with oil companies in California, calling for a ban on hydraulic fracturing, the practice used by the oil industry to extract oil and gas from shale formations, and harshly criticizing offshore oil development, seeking to limit new drilling along the California coast. Jeff Ordower of the 350 Action organization said:"Harris has always been an opponent of big oil."