Trump's Positive Coronavirus Test Result Roils Financial Markets
Markets face a double whammy of bad news after the president's health upended an election heading into its final stretch and the September jobs report proved disappointing.
Financial markets reacted with caution to news overnight that President Trump and the first lady tested positive for the coronavirus.
Many Asian markets were closed for a holiday. Japan's Nikkei average dipped less than 1%. Stock futures in the U.S. pointed to a lower open on Wall Street, but not dramatically so. Dow futures were down about 300 points by 4 a.m. ET, or just over 1%. The S&P 500 index futures fell by a similar amount.
Markets have shown larger swings in recent days as investors tried to game out prospects for another round of relief payments from Washington. House Speaker Nancy Pelosi, D-Calif., has been negotiating over a possible package with Treasury Secretary Steven Mnuchin, but the talks have yielded no breakthrough yet.
Earlier relief payments helped cushion the financial fallout from the pandemic, but much of that aid has now expired. A report from the Commerce Department on Thursday showed that personal income fell in August. Modest wage gains were more than offset by a deep drop in unemployment benefits.
The Labor Department issues a closely watched jobs report at 8:30 a.m. ET on Friday. It's the last snapshot of the U.S. labor market before the November election. Job gains slowed in July and August, so investors will be watching for any further decline. So far, the economy has recovered about half the 22 million jobs that were lost in March and April.
The president's positive coronavirus test is the latest twist in what has been a pandemic roller coaster for financial markets. Stocks fell sharply in the spring as the virus spread across the globe. But U.S. markets then mounted a remarkable comeback. Thanks to a surge in big technology shares, both the S&P 500 and the Nasdaq indexes hit new highs in early September.
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