U.S. stock futures took a sharp dive on Friday as news broke that President Donald Trump has tested positive for Coronavirus.
Dow Jones Industrial Average futures plummeted 500 points in reaction to the news that Donald Trump has tested positive for Covid-19. S&P 500 futures and Nasdaq 100 futures were also tanking hard as the news broke on Friday morning.
The market move, which is expected to extend during trading today, has wiped out a week’s worth of gains on major indices.
POTUS Catches Covid-19
Trump tweeted that both he and the First Lady tested positive and that they will now quarantine themselves. One of his closest aides, Hope Hicks, was tested positive prompting the POTUS and his wife to take the test. Hicks traveled with the President aboard Air Force One several times this week.
Trump has repeatedly mocked mask wearing and questioned the science regarding the pandemic.
The House of Representatives passed a $2.2 trillion Democrat-only fiscal stimulus package despite Democrats and the Trump administration remaining divided on key items in the legislation. This created momentum on markets earlier this week, but they are currently being eroded as the news breaks.
Regarding job cuts and increased Covid-19 cases nationwide, partner at Advisors Capital Management LLC, Joanne Feeney, said on Bloomberg TV;
“The risks to the rally are real. What’s very unusual is that there is a lot more near-term risk at the moment than longer term.”
Markets in Asia are mostly closed for a holiday today so there is no trading in China, Hong Kong, Taiwan, India and South Korea. The Tokyo Stock Exchange resumed following Thursday’s outage but had fallen a percent at the time of writing.
Forex and commodity update
The Yen and Treasuries, often seen as havens in times of market stress, rose against the dollar at the end of the week. In other forex news, Cable has been flat on the week and was currently at 1.287 at the time of writing while the Euro has strengthened against the greenback to 1.172.
Gold prices spiked on the news as investors flocked to safe haven assets. The previous yellow metal jumped a percentage point in an hour, topping $1,900/oz again and ending the week on a high.
Bitcoin did the opposite and started to fall as the news broke shedding 2.5% in a couple of hours. The move was unexpected as BTC also usually behaves as a safe haven asset when traditional markets are in turbulent times.