Financial markets respond cautiously after Trump tests positive for COVID-19

The Dow Jones Industrial Average on Friday closed down 134 points, or 0.48%, erasing earlier gains in the volatile session. U.S. markets had opened lower following news that President Donald Trump tested positive for COVID-19.

The S&P 500 ended the trading session down 0.96% and the tech-heavy Nasdaq slid 2.22%.

The tech sector saw some of the biggest losses Friday. Apple shares shed some 3.23%, Microsoft lost 2.95% and Intel Corp dropped 2.35%.

Hopes for additional stimulus may have eased some anxieties among investors. Late Thursday night, the House passed a $2.2 trillion coronavirus stimulus relief bill, though the Republican-led Senate is not expected to take up the measure.

PHOTO: President Donald Trump walks from Marine One as he returns from Bedminster, N.J., on the South Lawn of the White House in Washington, Oct. 1, 2020. (Joshua Roberts/Reuters)

MORE: Trump COVID updates: President, first lady test positive for coronavirus

Global financial markets also responded cautiously on the news of Trump’s diagnosis. Germany’s DAX closed down 0.33% on Friday and Britain’s FTSE index gained 0.39%. France’s CAC 40 Index was flat.

In Asia, Japan’s Nikkei 225 index fell just 0.67%.

White House physician Dr. Sean Conley said early Friday that the president and first lady, Melania Trump, who also tested positive for the virus, were “both well at this time” and plan to remain in the White House as they recover.

PHOTO: The Wall Street street sign is framed by a giant American flag hanging on the New York Stock Exchange, Sept. 21, 2020. (Mary Altaffer/AP, FILE)

Mark Hamrick, Bankrate’s senior economic analyst, said news of the president and first lady testing positive for COVID-19 “marks the addition of further uncertainty when it was already abundant, typically toxic for financial markets.”

“Aside from the personal implications for the first family, this and any related developments will likely be key drivers for stock investors in the near term,” he added. “Longer term and outside the news cycle, the typical drivers will remain most relevant, including earnings, dividends and interest rates. As is always the case, long-term investors need to try to look through the near-term fog.”

The stock market is at “some risk of heightened volatility in the coming days and weeks” because of the upcoming election, Hamrick noted, but the president’s diagnosis “may exacerbate that risk amid no shortage of other sources of uncertainty and volatility.”

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