Global markets have been spooked this morning as it was revealed the President of the United States had caught coronavirus and the price of oil tumbled.
Pre-market indicative prices suggest US stocks may fall as much as 1.2 per cent when markets open later today (October 2) as Donald Trump announced he had tested positive for coronavirus.
Russ Mould, investment director at AJ Bell, said: “Donald Trump catching coronavirus has put the markets in a mild state of disarray.
“First, the President of the United States becoming ill creates a sense of instability for markets in general. Second, it raises the question of how the presidential election will play out – has Joe Biden also been affected, will Trump be well enough to continue the debating while self-isolating, and will the elections be postponed?”
Markets are likely to react negatively to a Biden win next month as his intentions to raise taxes and clamp down on the technology sector could impact the main players on the US stock market.
Oil prices have also suffered. The price of Brent Crude Oil — the international benchmark oil price — fell to $39.92 (£30.82) per barrel this morning, down 2.5 per cent.
The global oil industry has faced a sharp drop in demand throughout the coronavirus crisis as countries across the globe locked down to tackle the crisis, limiting both domestic and international travel.
Mr Mould said oil was an “economic bellwether” and a decline in the price could be a red flag that the global economic recovery faced some near-term headwinds.
The FTSE 100 has dropped 0.55 per cent since opening this morning with energy, mining and consumer cyclicals the worst performing parts of the market.
The UK’s blue chip index has suffered compared to global markets in recent months and has not seen the impressive rally enjoyed by other indices, down 23 per cent year-to-date.
Mr Mould added: “In the grand scheme of things, the scale of these declines isn’t as dramatic compared to how the markets behaved in February and March as the pandemic unfolded. It certainly isn’t time to panic.”
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