Biden vs. Trump: What each candidacy could mean for markets

With current President Joe Biden and former President Donald Trump securing enough delegates to become the presumptive nominees of their respective parties, investors are now closely examining how each candidate's policies could potentially impact markets. Key areas of interest include inflation, taxes, immigration, and global trade.

Yahoo Finance's Rick Newman breaks down the details, providing insights into how each candidate's approach could affect the potential TikTok ban.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

- President Biden and former president Donald Trump will officially square off in a rematch for the 2024 presidential election after securing enough delegates to become their party's nominees. Yahoo Finance's Rick Newman joins us with the details. And Rick, I want to talk about the market reaction here-- hello, --from you and your Adidas Sambas as always. What does this mean for markets? Is the race going to have much of an impact or is it really about pricing and the potential outcome?

RICK NEWMAN: I mean, markets saw this coming. This is the rematch. Everybody foresaw and nobody wants. So there's no surprise here. Markets have other things on their minds right now. Investors do, but when we get to within 6, 8, 10, or 12 weeks of election day, there are some major issues on the table here, depending on who the winner is.

Corporate taxes, individual taxes. Are we going to have another Trump trade war with him saying he now wants to slap more tariffs on imports from every place, and even larger tariffs on imports from China? Different attitudes toward immigration. Trump recently said he would consider entitlement cuts, which means that perhaps trimming the benefits for Social Security and Medicare.

And many other things. So this is actually-- I mean, the political geeks are all talking about the future of democracy is at stake. Well, whether it is or isn't, there's a lot of money at stake too, depending on the outcome in November.

- There certainly is. And Rick, let's talk about what is playing out in DC today. Because when we look ahead to the election, we've heard both sides of the aisle, but specifically Donald Trump talking about social media and how that played or how he views that played into the results of 2020. But they're voting today, the houses, on a TikTok ban. If that goes through, how big-- I guess, what are the 2024 implications then?

And then also when you see a name like Rumble being a top trending ticker here on Yahoo Finance, what do you think the odds are that it will be divested versus an all out ban?

RICK NEWMAN: Well, a long series of questions there. And this has been a sleeper issue that suddenly has been propelled to front and center. So this is what's going on with TikTok. So first of all, Trump tried to ban it by executive order when he was president, court shot that down. So the assumption was, yes, Trump would try to ban it again if Congress were actually to pass legislation.

But now Trump says, no. Maybe we shouldn't ban it because it would just give the other social media apps that he dislikes more market share. And that comes after he met with Jeff Yass who is a billionaire investor who owns part of TikTok. So Trump now apparently is not so much in favor of banning TikTok. Joe Biden joined TikTok in January and he has since posted something like 60 videos there. That's his campaign, obviously, trying to appeal to young people with these sort of snarky videos.

But Biden says he would sign a bill to ban TikTok. So he would wipe himself off. OK. So what's really going to happen here? So the legislation could pass the House, it's going to face a harder track in the Senate. Let's call it 40% likelihood that this ban-- so-called ban would actually pass Congress this year. That's before the election in November.

Biden now says he would sign that. But really important to keep in mind, the main point of this bill is to force the sale or divestiture of TikTok by the Chinese owners, in other words, they sell it to somebody who's not based in China. And they have to have the punishment, if they don't do that, which is the ban.

The main goal is not to ban TikTok if this legislation actually becomes law. The most likely outcome is it forces a sale rather than TikTok just disappears. And by the way, if TikTok disappeared, some number of millions of voters would punish whoever they felt was responsible for that. And if Biden's the guy who signs the law, I mean, they would punish him.

- What is the appetite, though, from China to allow that sale to go through seems to be the big question. Because whether or not that's what Congress decides, China is still in control.

RICK NEWMAN: So it's kind of an open question like how much does the Chinese government actually control TikTok? I mean, the Chinese government is not the owner of TikTok. The owners are based in Singapore, I believe. And so people in the intelligence community and elsewhere say, well, the nature of any company in China is that when the Chinese government asks you to do something, you do it.

So let's say that assumption is true, then the Chinese government wants a Chinese entity to continue to own TikTok because whatever it might do, propaganda during a crisis or a war over Taiwan or something, it wants to have that leverage. So they're going to oppose this. I mean, they can't stop it if there is enough momentum in Washington to make it happen.

And again, just to remind everybody, if this law happens, the most likely thing is just a sale of TikTok and TikTok continues to operate as everybody knows it rather than it just gets shut down. I mean, I guess there is a 2% chance that the ban actually goes into effect and TikTok is shut down. But if you're the owner, you'd just be leaving tons of money on the table. Like, why would you do that?