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Trump’s positive coronavirus test rocks stock markets

Agence France-Presse

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Trump’s positive coronavirus test rocks stock markets

People walk near the New York Stock Exchange in lower Manhattan on October 2, 2020. Stocks and markets around the world have fallen in morning trading as investors digest the overnight news that President Donald Trump has Covid-19. Spencer Platt/Getty Images/AFP


'We are seeing some risk aversion on the back of the Trump news, although as yet the moves we're seeing are quite modest,' says Oanda analyst Craig Erlam

News that United States President Donald Trump and his wife Melania had tested positive for the coronavirus rocked global markets on Friday, October 2, stoking uncertainty in the world’s biggest economy just one month before Americans go to the polls.

Confirmation of the positive test overnight first hit Asian bourses, setting up Europe for a weak start, which was confirmed when Wall Street followed suit and opened about 1% lower.

Investors then trimmed their losses, with the Dow ending the day lower just 0.5%, taking the view that, at this stage, there was no reason to panic – although that could change given the huge potential implications of a president falling ill weeks ahead of the November 3 election. analyst Patrick O’Hare said the initial “knee-jerk sell-off makes sense” given no one knows how the president’s diagnosis will affect the vote or a pending contested Supreme Court nomination.

The fact that the market stabilized after the initial fall shows investors were not “catastrophizing” the possible outcomes, O’Hare said.

Upbeat comments from House Speaker Nancy Pelosi regarding ongoing talks with Treasury Secretary Steven Mnuchin on a long-delayed stimulus package for the battered US economy also lifted traders’ hopes.

However US jobs data came in weaker than expected, adding to doubts about the economy’s recovery, while oil prices struggled amid concerns about too much supply and too little demand.

‘Political uncertainty’

“The increase in political uncertainty connected with Trump’s diagnosis is…weighing on stocks and stock futures,” Rabobank analyst Jane Foley told Agence France-Presse (AFP). 

“There are sufficient unknowns at this stage to fan speculation that the election could be quite different from the one that was expected just 24 hours ago.”

The extraordinary setback for Trump, 74, has immediate political consequences just 31 days before Election Day, forcing him to cancel campaign trips and adding new volatility to an already turbulent contest.

The White House doctor said Trump, who was reported to be suffering “mild symptoms,” would continue his presidential “duties without disruption.”

After markets closed on Friday, the White House said Trump would spend the coming days at a military hospital just outside Washington.

Trump took a test on Thursday, October 1, after close aide Hope Hicks tested positive, with both he and his wife then going into quarantine at the White House.

“We are seeing some risk aversion on the back of the Trump news, although as yet the moves we’re seeing are quite modest,” Oanda analyst Craig Erlam told AFP.

“Should Trump’s health deteriorate, I expect we would see more significant moves, but there’s no sign of that at this moment.”

Key figures around 9 pm GMT
  • New York – Dow Jones: DOWN 0.5% at 27,682.81 (close)
  • New York – S&P 500: DOWN 1% at 3,348.42 (close)
  • New York – Nasdaq: DOWN 2.2% at 11,075.02 (close)
  • London – FTSE 100: UP 0.4% at 5,902.12 (close)
  • Frankfurt – DAX 30: DOWN 0.3% at 12,689.04 (close)
  • Paris – CAC 40: FLAT at 4,824.88 (close)
  • EURO STOXX 50: FLAT at 3,190.93 (close)
  • Tokyo – Nikkei 225: DOWN 0.7% at 23,029.90 (close)
  • Hong Kong – Hang Seng: Closed for holiday
  • Shanghai – Composite: Closed for holiday
  • Euro/dollar: DOWN at $1.1716 from $1.1748 at 9 pm GMT
  • Dollar/yen: DOWN at 105.35 yen from 105.53 yen
  • Pound/dollar: UP at $1.2935 from $1.2891 
  • Euro/pound: DOWN at 90.54 pence from 91.14 pence
  • West Texas Intermediate: DOWN 4.4% at $37.00 per barrel
  • Brent North Sea crude: DOWN 4.5% at $39.11


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