US Stock Futures Plunge after Trump Tested Positive for Covid-19

United States stock futures extended losses on Friday after President Donald Trump said he and his wife have tested positive for the coronavirus, weeks ahead of elections.

Futures for the S&P 500 slid 1.21 percent by early afternoon in Asia, while US Treasury yields also fell as bond prices rose.

The US dollar was also higher, particularly against the British pound, the Australian and New Zealand dollars as investors sought what they consider relatively safe assets.

Trump said on Twitter that he and his wife had been tested for coronavirus after Hope Hicks, a senior adviser who recently travelled with the president, tested positive.

He later tweeted that he and the first lady had tested positive: “We will begin our quarantine and recovery process immediately,” he said.

Trump’s positive coronavirus test result could cause a new wave of market volatility as investors brace for the hotly contested presidential election in November.

“It has the potential to reduce Trump’s campaigning ability. He’s got a lot on and it’s an interruption,” said Sean Callow, currency strategist at Westpac in Sydney.

“It also hurts him as far as the whole narrative that it’s really not much to worry about – it puts the COVID crisis itself back front and centre.”

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.27 percent. Australia’s S&P/ASX 200 index fell 0.98 percent as a decline in oil and copper prices weighed on the country’s resources sector.

Japan’s Nikkei 225 index erased gains and fell 0.69 percent as the Tokyo Stock Exchange resumed normal trading after its worst-ever outage brought the world’s third-largest equity market to a standstill.

Euro Stoxx 50 futures were up 0.06 percent, German DAX futures rose 0.03 percent, but FTSE futures were down by 1.02 percent.

Markets had been choppy early on Friday after a spate of data, including jobless claims and consumer spending, suggested that the plodding US economic recovery could be losing steam.

Futures for the tech-heavy Nasdaq fell 1.7 percent. The benchmark 10-year Treasury yield fell to 0.6545 percent.

China’s stock and bond markets, foreign exchange and commodity futures markets are closed from October 1-8 for the Golden Week holiday. South Korean and Hong Kong markets are also closed on Friday for holidays.

US markets kicked off the fourth quarter by closing higher on Thursday while investors tracked progress in negotiations for additional fiscal stimulus.