The U.S. stock market is plunging in pre-market despite the positive sentiment around coronavirus treatment. Dr. Anthony Fauci’s endorsement of Gilead Remdesivir drug trial tests was not enough to convince investors of a recovery.
The official count of confirmed coronavirus cases reached 1,031,659 according to the Centers for Disease Control and Prevention. The U.S. government is narrowing down the treatment of COVID-19 to Hydroxychloroquine and Gilead Remdeisivir.
The government of the U.S. is expressing optimism towards several methods of treating coronavirus patients in the short-term. The authorities are hopeful that interim treatment methods may benefit infected individuals in the upcoming months.
Remdesivir, a medicine manufactured by biotech corporation Gilead Sciences, is considered to be a promising drug in aiding recovery from coronavirus.
Fauci said that the results of the first clinical trial involving Remdesivir were “quite good,” adding that they are highly significant based on the time of recovery.
The U.S. Food and Drug Administration (FDA) and Gilead Sciences are reportedly preparing to work on distributing Remdesivir as soon as possible at a large capacity.
In recent weeks, any positivity surrounding a potential coronavirus drug has resulted in a profound impact on the stock market.
On April 7, for instance, the FDA officially approved a new drug application for malaria drug Hydroxychloroquine Sulfate Tablets USP. In the next 48 hours that followed, the U.S. stock market surged by 4.7%.
Yet, following the cheerful comments about Remdesivir by Fauci and the U.S. government, the U.S. stock market slipped for two consecutive days.
The Dow Jones Industrial Average (DJIA) closed on April 30 with a loss of 288 points. Pre-market data indicates that the Dow is set to open with another 472 points, leading to a 760-point drop within merely two days.
The lackluster performance of the U.S. stock market demonstrates the lacking confidence of investors towards a full coronavirus recovery.
The short-term stock market slump also coincides with reports that suggest coronavirus is likely to be seasonal. Top scientists in South Korea, China, and Hong Kong said in late April that coronavirus may be seasonal.
In early April, Fauci warned that it is not likely to completely eradicate the virus from the planet.
Since mid-April, the U.S. stock market consistently demonstrated high levels of euphoria and optimism.
Primarily driven by the Federal Reserve’s unprecedented release of new stimuli, the stock market continued to climb upwards approaching the Q2 earnings season.
But, even the largest conglomerates in the U.S. were unable to safeguard themselves from the economic consequences of coronavirus.
Apple refused to provide revenue guidance for June, which is highly abnormal for a company of its size.
In late April, the tech and internet stocks in the U.S. signaled the highest level of optimism in more than a decade.
The unusual level of positivity coincided with technical indicators like the Relative Strength Index (RSI) showing overbought conditions for the U.S. stock market.
Unfavorable technical indicators and the lack of confidence of investors in new COVID-19 drugs are expected to intensify selling pressure on U.S. stocks in the near-term.
This article was edited by Samburaj Das.