US equity futures index plunged after President Donald Trump tweeted that he has COVID-19. The president announced that he and First Lady Melania Trump tested positive for COVID-19, sending futures to decline by more than 1.6% or 500 Dow points, CNBC reports.
“Tonight, @FLOTUS and I tested positive for COVID-19,” the president tweeted. “We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!”
The S&P 500 futures dropped 1.7% and futures tied to the Dow Jones Industrial Average, and the NASDAQ-100 each shed almost 2%, which according to the Wall Street Journal, “suggests that the US markets could open lower.”
The fall in stocks was not only restricted to the US market; Asian shares also fell sharply. The stocks in Asian closed at 0.8% despite trading up throughout much of the day, Fox Business wrote.
Experts have been responding to this situation and putting out all manner of forecasts. A senior market analyst, Jeffrey Halley, while speaking with Bloomberg, said that every market hates uncertainty, and the current situation with President Trump is just that – a huge uncertainty.
The president’s situation puts a huge question mark around the entire election. Prior to the latest announcement about his health, there was already a certain amount of uncertainty in the market, with traders jittery about the possible outcomes.
This new development only goes to show that indeed, a second wave of the coronavirus is here, raising fears amongst investors that actions may be taken by the government to slow down the pace of the reopening of the economy.
Meanwhile, the White House physician, Sean Conley, said in a statement that “the President and Lady are both well at this time, and they plan to remain at home within the White House during their convalescence.”
The statement further clarified that the president would go about his regular duties without the slightest interference en route his recovery process.
Investors are considering what implications this development might have on stimulus package negotiations that have been going on for months now, lockdown relaxation measures, and the election itself.
How long this situation with the US stock futures lasts will depend on the extent of the spread of the virus within the White House, experts say. Some investors doubt the ability of key persons within the administration to function, saying the coronavirus infection may have been widespread. This remains to be seen. More clarity might be obtained by the end of the weekend.
Shares of technology companies are already having a free fall. Apple’s shares fell by 3% and that of Tesla by 5%. This pressure is coming on the heels of a possible win by Democrats. What does a Joe Biden win signify for these companies? Higher tax rates.