Are you looking at the ugliness in the major indices and wondering why the stock market is sliding today? Look no further than headlines out of the White House. News that President Donald Trump and First Lady Melania Trump tested positive for the novel coronavirus is sending stocks straight down.
Days after the first presidential debate, Hope Hicks, a close Trump advisor, tested positive. Because of her proximity to Trump and her attendance at the Tuesday event, speculation and fear set in Thursday night. Then came the Trump coronavirus news.
Trump himself tweeted about the positive diagnosis in the early morning Friday, promising that he and Melania would immediately begin to quarantine.
Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!
— Donald J. Trump (@realDonaldTrump) October 2, 2020
It is not particularly surprising to see stocks slide in response. We are just weeks away from Election Day, and volatility is already high. Concerns over voter fraud and a contested election have many investors worried. Now, add in a positive coronavirus test, and the future is even more uncertain. Importantly, because of the debate, former Vice President Joe Biden will also undergo testing today.
What exactly is sinking most in the market? Oil prices immediately began to tumble, as the Trump coronavirus news worsened an already volatile sector. Big players like Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) were down more than 2% in pre-market trading. Traditional safe-haven assets like gold and silver initially turned higher, but have since headed back into the negative. Perhaps the only hedge this morning for investors is the CBOE Volatility Index (VIX), which is up 10%.
Market Slides on Trump’s Positive Test
One thing investors should note is that some vaccine makers are rallying this morning. Vaxart (NASDAQ:VXRT), iBio (NYSEMKT:IBIO) and Inovio Pharmaceuticals (NASDAQ:INO) are all up in pre-market trading. Granted, there are a variety of factors weighing on this space. Trump recently said the pandemic was almost over, but he has also bolstered support for Operation Warp Speed.
Regardless, many investors might see the president testing positive as further support for a coronavirus vaccine. Look for more speculative names like INO, VXRT and IBIO to have a wild ride in the market today.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.