US stocks sink after Trump tests positive for COVID-19

United States stock markets opened lower on Friday after news that President Donald Trump has tested positive for COVID-19 injected even more uncertainty into an already contentious US election, while a less than stellar snapshot of the US jobs market signalled the economic recovery is losing momentum.

The Dow Jones Industrial Average fell more than 370 points at the opening bell on Wall Street but quickly moved off that low. At about 10am in New York (14:00 GMT), the Dow was down 223.79 points, or less than 1 percent, at 27,593.11.

The S&P 500 – a gauge for the health of US retirement and college savings reports – was down 1.06 percent, while the tech-heavy Nasdaq Composite Index was off 1.66 percent. Both indexes had clawed back some of their losses suffered at the start of trading on Wall Street.

President Trump confirmed via Twitter on Friday he and First Lady Melania Trump were beginning their quarantine and recovery process immediately.

“We will get through this TOGETHER!,” the president said.

Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!

— Donald J. Trump (@realDonaldTrump) October 2, 2020

The news rippled through global financial markets, sending major stock indexes in Asia and Europe lower.

But the edge came off the climate of uncertainty shortly after the open of trading on Wall Street.

Speaker of the House of Representatives, Nancy Pelosi, reassured Americans talks between the White House and Democrats in Congress for a new round of virus relief aid are continuing.

Economists have been urging Washington to pass a new round of stimulus measures to keep the nation’s economic recovery on track.

Before the open of trading in New York, investors were greeted by even more evidence the jobs market recovery is shifting into low gear.

 

The economy added 661,000 jobs in September – fewer than many economists were expecting – while the unemployment rate fell to 7.9 percent, according to the US Department of Labor.

“Job growth is moderating just as fiscal aid is expiring – a toxic cocktail,” Oxford Economics chief US financial economist Kathy Bostjancic wrote in a note to clients.

“The slowing momentum in the labor market bodes poorly for the broader recovery and points to increasing scarring effects from the crisis,” she added.

Of the 22 million jobs lost in March and April, only about 11.4 million have been recovered.

“At this pace of slowing job growth, it will take years to return to the pre-pandemic labour market,” Elise Gould, senior economist at the progressive-leaning Economic Policy Institute wrote in a Friday note.

Though job creation is moving in the right direction, millions of Americans have been out of work for months without any hope in sight. Many job losses are becoming permanent and layoffs remain widespread.