LONDON: Global stock markets were lower Friday after US President Donald Trump revealed that he and his wife had tested positive for the coronavirus, sparking even more uncertainty in the world’s biggest economy just one month before Americans go to the polls.
The turmoil sent US futures sinking as investors nervously awaited Wall Street’s opening at 1:30pm, with sentiment additionally hit after key non-farm payrolls data came in weaker-than-expected.
The Dow opened down 1.2% at 27,485.51 points, with the tech-rich Nasdaq Composite Index falling 1.7% to 11,128.88.
Europe’s major bourses dropped sharply at their open before clawing back some ground.
Oil meanwhile fell sharply again, posting losses of nearly 5% on the prospect of too much supply and too little demand.
“The increase in political uncertainty connected with Trump’s diagnosis is … weighing on stocks and stock futures, and supporting safe havens such as the yen, Swiss franc and the US dollar,” Rabobank analyst Jane Foley told AFP.
“The extent to which the election campaign is affected will depend on the outcome for Trump’s health.”
She added: “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 has said that both were well and that Trump would continue his presidential “duties without disruption”.
The president had taken a test after his close White House aide Hope Hicks tested positive earlier in the day, meaning he will now have to go into quarantine just weeks before one of the most crucial elections the country has ever had.
Investors were already feeling pessimistic over US lawmakers’ failure to pass a new stimulus bill, dealers said.
All eyes on Trump health
“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.”
Sentiment was under pressure as hopes for a new US coronavirus rescue package faded.
“It is also worth noting that stimulus talks this week have not gone well which may be contributing to the risk-aversion we’re seeing in the markets, while today’s (US) jobs report may be making people a little cautious,” Erlam added.
Democrats pushed their latest US$2.2-trillion proposal through the House, where they hold a majority, but without any opposition support, there is no chance it will be agreed by the Republican-dominated Senate.