U.S. stock-index futures on Friday were trading sharply lower, along with global markets, with investors attributing declines to news that President Donald Trump and first lady Melania have contracted coronavirus and are under quarantine.
The news that the 45th president and his wife have tested positive for the disease has stocked uncertainty in the market, momentarily overshadowing negotiations for another round of coronavirus stimulus and the closely watched monthly report on the labor market due later in the morning.
How are stock indexes trading?
Futures for the Dow Jones Industrial Average
were declining by about 234.25 points lower, or 2%, to reach 11,342.25
For the week, the Dow
is on pace for a weekly gain of 2.4%, the S&P 500 index
was looking at a rise of 2.5%, while the Nasdaq Composite Index
was set for a weekly advance of 3.98%, as of Thursday’s close.
What’s driving the market?
President Donald Trump tweeted early Friday that he and the first lady had tested positive for coronavirus, delivering an unsettling blow to U.S. and global markets that had mostly been trending higher on the week.
The White House’s doctor said that neither were “doing well” and will remain in quarantine as they recover from COVID-19, the disease derived from the novel strain of coronavirus.
“Everyone was anticipating the October surprise. Still, honestly, this one came flying in from the left-field, not only caching virtually everyone flatfooted but probably hit at the most vulnerable time of the week as a risk had turned off due to the fiscal impasse,” wrote Stephen Innes, an independent market strategist.
Some investors are making the case that Trump’s forced quarantine, as he deals with the deadly illness, could hurt is campaign efforts as the race for the White House with challenger former President Vice President Joe Biden heats up headed into the Nov. 3 election.
“The concern for equity market bulls is that while Trump is in self isolation, he will lose at least 10 days of campaigning at a critical moment as elections loom large, with polls and betting odds already suggesting Joe Biden is leading the race.” wrote Fawad Razaqzada, market analyst at ThinkMarkets, in a Friday note.
Strategists said that the surprising diagnosis also forces investors to reassess the likelihood of Biden victory and its implications for markets, since Trump was widely viewed as a business-friendly president and the former vice president was considered more likely to raise taxes and increase regulations.
“The markets evidently support the business-friendly President, otherwise we will not have seen much of a reaction,” Razaqzada said.
The development with the disease comes amid an apparent impasse in Washington with the House symbolic passing a $2.2 trillion Democratic coronavirus stimulus bill Thursday night that Republicans are almost sure to reject. That is is likely to scuttle a deal even asHouse Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin agree to continue negotiations.
Meanwhile, investors were bracing for what would have been the main attraction in Friday’s dealings: the jobs report.
Economists surveyed by MarketWatch expect the economy added 810,000 jobs in September, down from 1.37 million in the prior month. The unemployment rate is expected to drop to 8.2% from 8.4% in August.