The recent news of President Trump testing positive for COVID-19 has led to a rollercoaster of stock market fluctuations.
Following President Trump’s official confirmation of contracting COVID-19 last week and subsequent hospitalization at Walter Reed Military Hospital, stock prices took a noticeable dip. The Dow dropped approximately 135 points, and the S&P 500 fell by about 1%. However, after the President’s brief stay at the hospital, he returned to the White House on Monday, stating that he was feeling better. This news sparked a surge in the Dow, climbing by 466 points by the close of Monday’s trading session, marking the most significant increase since July.
Despite the significant spike on Monday, market indexes have stabilized since then. Early trading on the following day saw a slight decline of 0.1% in the S&P, while the Dow and Nasdaq showed modest gains of about 0.2%. The market seems to be struggling to find a clear direction amidst the uncertainty surrounding the President’s health and the ongoing political climate.
Mark Zandi, chief economist at Moody’s Analytics, expressed concerns in a report, suggesting that the combination of President Trump’s illness and the current political tensions may erode people’s confidence in the economic recovery. This loss of confidence could potentially lead to reduced spending, investments, and hiring, ultimately jeopardizing the recovery progress.
Furthermore, following the President’s positive test, several conservative members of Congress also tested positive, linked to a gathering at the White House Rose Garden. These infections have raised doubts about Congress’s ability to pass a much-needed stimulus bill. Majority Leader Mitch McConnell has ordered a halt on Senate activities for the next two weeks, casting doubt on the possibility of reaching a new stimulus deal before the upcoming November election.
If a new stimulus package is not promptly agreed upon, it could negatively impact investor confidence once again, potentially triggering further market volatility.
