Markets have fallen into turmoil after Donald Trump tested positive for coronavirus, although the worse may be yet to come.
Stock Markets have tumbled in pre-market trading after President Donald Trump tested positive for coronavirus. Dow futures have fallen by more than 400 points, while Nasdaq and S&P 500 futures dropped by over 1.5% in a matter of minutes.
Large-cap stocks such as Apple, Amazon, Microsoft, and Facebook are all down in early trading by around 2%. Investors are already worrying about the implications of Trump’s positive test, which plunges the upcoming November election into uncertainty.
While Trump has claimed he’s “feeling good,” he needs to quarantine for at least the next 10 days. If his condition gets worse, it may lend credibility to his presidential rival Joe Biden, who has made a point of taking the Covid-19 pandemic more seriously than the president.
The world learned of Trump’s positive test at 12.54 AM Eastern Time. And predictably enough, he chose Twitter as the platform to make his announcement.
Stock markets reacted immediately. Future indexes for the Dow Jones, S&P 500, and the Nasdaq all plunged within a minute of Trump’s tweet.
The Nasdaq 100 (NQ=F) fell from 11,554 at 12:53am to 11,487 at 12:56am, before completing a 2.1% dive by falling to 11,306 by 1:34am. The Mini Dow Jones (YM=F) tumbled from 27,625 at 12:53am to 27,134 at 1:34am, a drop of 1.77%. And the E-Mini S&P 500 (ES=F) slipped by 1.8%.
Markets have stabilized a little since the immediate aftermath of the president’s coronavirus announcement. All three futures indexes remain down by anything from 1.2% to 1.8%.
The same picture applies to many large-cap stocks. Apple, Amazon, Microsoft, Facebook, Alibaba, Berkshire Hathaway, and Visa are all down in pre-market by as much as 2%. Tesla is down by nearly 4%, as of writing.
Donald Trump’s positive coronavirus test has pushed America into uncharted territory. According to CDC guidelines, Trump now needs to quarantine for at least ten days. But if he develops symptoms and these worsen, he may be out of action for considerably longer.
Trump is reported to be doing well so far. The First Lady Melania Trump — who has also tested positive for coronavirus — tweeted soon after her husband that they’re both “feeling good.”
Such tweets haven’t calmed markets, because investors realize things may get worse for Trump. He’s 74 years old and clinically obese. Studies have found that obesity significantly increases the risk of hospitalization and death from coronavirus, with one paper concluding that this risk increases by 48% on average.
Trump also has a form of heart disease and reportedly made an unscheduled visit to hospital in November 2019 because of a possible heart attack. Heart conditions also increase the risk of complications from Covid-19, according to studies.
This all indicates that Trump belongs to the (very) “at-risk” group when it comes to coronavirus. He will likely have the best medical care available, but he could potentially suffer. It’s this possibility that has thrown markets into turmoil, and things could certainly get worse for stocks if the president’s health deteriorates.
Assuming that Trump falls seriously ill (or worse), it’s hard to say what would happen to November’s election. Possibly Pence (or another Republican) would stand in for him. Possibly there would be a delay. It’s also possible that a serious Covid-19 illness for Trump could boost Biden’s credibility, helping the Democrat win the White House.
It’s debatable how the stock market would respond to a Biden win, although some analysts have predicted a slump. Judging by how the market has responded to news of Trump’s illness, they may be right.