U.S. stock futures and Asian shares fell Friday after President Donald Trump said he and first lady Melania Trump had tested positive for the new coronavirus.
The future contracts for both the S&P 500 and the Dow industrials dropped nearly 2% but were trading 1.2% lower several hours later. Oil prices tumbled about 3%.
Trump tweeted news of his test results just hours after the White House announced that senior aide Hope Hicks had come down with the virus after traveling with the president several times this week.
The positive test reading for the leader of the world's largest economy heaps uncertainty onto a growing pile of unknowns investors are grappling with, first among them how it might affect the Nov. 3 election and American policies on trade, tariffs and many other issues beyond then.
“To say this potentially could be a big deal is an understatement,” Rabobank said in a commentary. “Anyway, everything now takes a backseat to the latest incredible twist in this US election campaign.”
A statement issued by Trump's doctor saying both he and his wife were well and that he would continue his duties appeared to calm the markets' reaction.
Germany's DAX gave up 0.6% to 12,649.29 and the CAC 40 in Paris lost 0.6% to 4,796.97. Britain's FTSE 100 slipped 0.5% to 5,850.86.
Trading in Asia was thin, with markets in Shanghai and Hong Kong closed. The Nikkei 225 index shed strong early gains, losing 0.7% to 23,029.90 after the Tokyo Stock Exchange resumed trading following an all day outage due to a technical failure.
Reports that the Japanese government is preparing new stimulus measures to help the economy recover from a prolonged downturn worsened by the coronavirus pandemic provided only a temporary lift. Prices fell further after Trump's announcement.
Australia’s benchmark S&P/ASX 200 slipped 1.4% to 5,791.50. Shares in Singapore, Thailand and Indonesia also fell.
On Thursday, the benchmark S&P 500 ended the day 0.5% higher, at 3,380.80, the Dow Jones Industrial Average rose 0.1% to 27,816.90 and the Nasdaq composite rose 1.4% to 11,326.51, as big tech-oriented stocks propped up the market, much as they have through the pandemic.
Such big swings have become routine as investors assess chances of a deal on Capitol Hill to send more cash to Americans, restore jobless benefits for laid-off workers and deliver assistance to airlines and other industries hit particularly hard by the pandemic.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued their talks on Thursday, but no breakthrough arrived before stock trading ended on Wall Street. Instead, there were only hopes that were periodically raised and dashed as government officials took turns criticizing each other.
“Things remain fluid; we all know what is at stake if this deal does not go through before markets sundown, it is unlikely to be pretty ugly," Stephen Innes of Axi said in a commentary.
Beyond potential political developments, investors will be watching for job figures due out Friday. Data released Thursday painted a mixed picture for the economy, with one report showing the number of workers filing for unemployment benefits last week fell to 837,000 from 873,000. That was less than economists expected, but incredibly high compared with before the pandemic.
With airlines and other major companies announcing layoffs and furloughs, another round of economic aid from Congress is seen as crucial. Treasury Secretary Stephen Mnuchin and House Speaker Nancy Pelosi have worked effectively together in the past, helping to drive through the previous economic rescue approved by Congress in March. But the country’s deepening partisan divide has stymied progress, with the presidential election only about a month away.
The yield on the 10-year Treasury was steady at 0.67%.
U.S. benchmark crude lost $1.12 to $37.60 per barrel in electronic trading on the New York Mercantile Exchange. It gave up $1.50 to $38.72 on Thursday. Brent crude, the international standard, lost $1.20 to $39.73 per barrel.
The dollar weakened to 105.21 Japanese yen from 105.54 yen. The euro weakened to $1.1724 from $1.1747.
AP Newsroom
Fri Oct 02 2020
A statement issued by Trump's doctor saying both he and his wife were well and that he would continue his duties appeared to calm the markets' reaction. - REUTERS
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.