Stock futures sank Friday morning as investors digested news of President Donald Trump testing positive for COVID-19. Early Friday morning, the president revealed via Twitter that he and the first lady had contracted the virus.
The announcement has caused a ripple in markets so far sinking both US stock futures and commodities like gold and oil as well. This news brings the coronavirus back into the forefront for investors, challenging an opposing narrative of recovery and reopening.
The Nasdaq has taken the biggest hit so far, down as much as 2.5% this morning. Here’s a look at major US markets this morning:
- Micro E-mini S&P 500 Futures (MES) | -0.64%
- Micro E-mini Nasdaq Futures (MNQ) | -1.54%
- Micro E-mini Dow Futures (MYM) | -0.5%
The news also fuels uncertainty surrounding the highly anticipated US presidential election on November 3rd and some analysts feel it will spike volatility in the near term.
One factor buoying markets is the progress in Washington toward another coronavirus relief bill which will include another stimulus package. Some analysts feel that investors have become desensitized to coronavirus-related news and will focus more on the stimulus package. Investors highly anticipate the outcome, which is sure to be a determining factor for overall market sentiment.
The chart above, created 100% FREE using NinjaTrader, displays daily price action in Micro E-mini S&P 500 futures since June. Price is currently near the 50-day SMA, a known inflection level among technical analysts.
Traders should keep risk management top of mind when trading unpredictable markets and take appropriate measures to protect investment capital.