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Dow Futures Crash as Coronavirus Forces Trump to Ban European Travel

Last Updated March 30, 2023 4:06 AM
Francois Aure
Last Updated March 30, 2023 4:06 AM

Dow futures sold off overnight as Donald Trump banned European travel for 30 days, extending an already dramatic stock market crash.

a man sitting at a desk in front of a microphone

  • Dow futures crashed overnight as President Trump announced a travel ban from Europe.
  • Continuing the stock market crash seen on Wednesday, this is a brave move to stem the spread of coronavirus.
  • Further spooking sentiment, the NBA has suspended its season after a Utah Jazz player tested positive, while famous actor Tom Hanks and his wife have also contracted the illness.

Dow futures plummeted 1,000 points overnight as Donald Trump made the astonishing decision to ban all travel from Europe for the next 30 days (from midnight Friday, except for the United Kingdom). The economic impact of this will be tremendous, and the stock market crash looks set to continue on Thursday.

Dow Futures Dive As White House Bans Most European Travel

the president of the united states giving a speech

Futures on all three major U.S. stock indices sold off , as the Nasdaq, Dow Jones and S&P 500 lost at least 4%

a line graph with a green line and a red line
Donald Trump ignited a crash in Dow Futures as he announced a 30-day travel ban from Europe. | Source: Yahoo Finance 

In the commodity sector, the price of oil responded very negatively to Trump’s speech, as crude fell 6%. This was unsurprising considering that demand is likely to crater further as trans-Atlantic aviation grinds to a halt. The price of gold edged down 0.5%.

Donald Trump’s pivot on coronavirus has been breathtaking. While the president was initially keen to downplay the danger posed to the U.S.,  he has shifted to a deeply protectionist stance amid backlash from health officials and the stock market.

Attempting to leverage the only thing that has not drawn criticism from the press – the China travel ban – President Trump is doubling down by halting all travel from Europe:

We made a life-saving move with early action on China. Now we must take the same action with Europe.

Trump Gives Up On The Stock Market, Focuses On Coronavirus Containment

Unfortunately for the Dow bulls, who saw the index dip into a bear market Wednesday, investors appear to be extremely disappointed with Trump’s financial measures. These support measures included expected liquidity injections for small businesses, support for hourly workers and some medical cost relief for at-risk groups.

a group of people sitting around a table with laptops

If you were after fiscal shock and awe, this was not the White House speech for you, and futures slid during the announcement and resumed their slide as Trump abruptly ended the statement.

A congested sounding Trump will not have done much to downplay rumors that he may have come down with coronavirus.

two tweets on twitter with one saying, another saying, and another saying
Source: Twitter 

These claims were made because a person confirmed to have contracted COVID-19 attended a CPAC meeting, prompting several high-profile conservative lawmakers like Ted Cruz to self-quarantine. The White House has strongly denied any need to test the president for the illness.

a man in a suit and tie standing in front of a window

Adding to colossal economic fallout, the NBA suspended its season after a Utah Jazz player contracted the coronavirus .

Elsewhere in entertainment, actor Tom Hanks and his wife have now contracted the coronavirus in Australia.

J.P. Morgan: Get Out On The Bounces

Amidst all the doom and gloom, there was a negative note from J.P. Morgan, which told CNBC that bounces only offer investors the chance to reduce their exposure  to the Dow and S&P 500:

We recommend “using bounces as opportunities to reduce exposure as a sustained rebound is unlikely to occur quickly. .. We think the selling .. by systematic investors and hedge funds is now mostly over .. Fundamental investors could sell more.

It could be a rocky session for Dow futures, and Trump is taking a massive gamble by implementing such drastic action with European travel.

However, this may be the bold step that investors have been waiting for from the president. Risk-on investors may become emboldened if these harsh new tactics start working to contain the spread of the coronavirus.

This article was edited by Sam Bourgi.