U.S. stocks fell on Friday after President Donald Trump and first lady Melania Trump tested positive for coronavirus.
The Dow Jones Industrial Average last traded down 200 points, or 0.8%, after dropping 430 points at the open. The S&P 500 fell 0.8%, while the Nasdaq Composite declined 0.9%.
Stocks traded off their opening lows on some optimism Congress will come together on a coronavirus stimulus deal.
“This kind of changes the dynamic because here they see the reality of what we have been saying all along,” House Speaker Nancy Pelosi said Friday on MSNBC. “I’m optimistic, I’m always optimistic. We always have to find a path, that is our responsibility to do so … We’ll find our middle ground. We’re legislators. We’ll get the job done.”
The House passed the $2.2 trillion Democratic coronavirus stimulus bill Thursday night, but Republicans oppose this package.
The president’s diagnosis added more uncertainty to the election, an event that was already weighing on the market and keeping traders on edge as they attempted to evaluate the possible outcomes. Shares of stocks tied to the economy reopening fell as the news highlighted the risk of a second wave of the coronavirus and raised fears that maybe lawmakers would slow the pace at which they relaxed coronavirus measures.
White House physician Dr. Sean Conley said in a memo, “The President and First Lady are both well at this time, and they plan to remain at home within the White House during their convalescence.”
Conley also said he expects Trump to “continue carrying out his duties without disruption while recovering.”
Trump was experiencing “mild symptoms” after testing positive for the virus, NBC News reported Friday morning, citing a White House official.
Vice President Mike Pence and second lady Karen Pence have both tested negative for the coronavirus, Pence’s spokesman said Friday. Treasury Secretary Steven Mnuchin has also tested negative, the Treasury’s assistant secretary for public affairs said Friday.
“This October surprise raises the already high level of political uncertainty markets are dealing with as election day approaches,” said Jeff Buchbinder, Equity Strategist for LPL Financial. “Markets appear to be increasingly pricing Joe Biden in as the favorite, and this news may not change that, but Trump could gain support from a quick recovery.”
The Trump tweet initially knocked down Dow futures more than 500 points in overnight trading.
Dow futures overnight
Shares of cruise lines and airlines were the biggest losers on Friday. Carnival and Norwegian Cruise Line fell more than 1% each. American Airlines and United Airlines also both lost over 2%
“It really brings into stark reality that we are potentially going into … a second wave,” said Jeff Henriksen, co-founder and CEO of Thorpe Abbotts Capital, to CNBC’s “Squawk Box Europe.” “President Trump getting this really highlights that in a way that I think it will focus attention back on the virus and the effects it will have.”
Technology shares also declined with Apple, Amazon, Microsoft and Facebook all losing about 1%. Tech stocks could come under pressure under a Democratic sweep scenario if it leads to higher tax rates and tighter regulations, many strategists have said.
Also weighing on the sentiment was a worse-than-expected September jobs report. Nonfarm payroll rose by 661,000 in September, the Labor Department said Friday in the final jobs report before the November election. Economists surveyed by Dow Jones expected a jobs gain of 800,000. The unemployment rate fell to 7.9% last month.
The sell-off in oil prices intensified as Trump’s coronavirus news added to the industry’s demand concerns. West Texas Intermediate crude, the U.S. oil benchmark, slid 4% to $37.10 per barrel on Friday.
Stocks have staged a historic rebound since the economic shutdown sent stocks tumbling in March. But the major averages all finished September lower, snapping a five-month win streak, as doubts emerge about the pace and breadth of the recovery.
— CNBC’s Christine Wang and Elliot Smith contributed to this report.
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