Stocks are having a volatile session on Monday after the long holiday weekend, as investors try to make sense of the rapidly developing coronavirus situation and await earnings reports this week.
Equities tumbled from Thursday’s close on Monday, giving back some of the considerable gains from the prior week, as investors continued to examine the impact of the coronavirus in conjunction with a historic oil production cut taking place.
The Dow Jones Industrial Average dropped as much as 600 points, or 2.6% but is currently off about 1.7% as of noon EST. The S&P 500 sank 2.5% but has rebounded about 1% while the Nasdaq Composite slipped 1.4% and has advanced 1% off its lows.
Stock Index ETFs are following equity markets lower as well, with the SPDR S&P 500 ETF Trust (SPY) down 1.39%, the SPDR Dow Jones Industrial Average ETF (DIA) falling 1.64%, and the Invesco QQQ Trust (QQQ) remains essentially flat on the day.
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, has been engaged in a battle of words with President Trump, who is pushing tweets that opt to fire the director.
Fauci said on Sunday he was cautiously optimistic that the outbreak was declining in the U.S.and that parts of the country may commence reopening next month. However, Fauci also said this does not mean the entire country would flip a “light switch” and return to normal. He also noted that the White House Coronavirus task force could have taken earlier action against the pandemic and saved more lives.
The coronavirus has continued to spread rapidly and confirmed cases now top more than 550,000, a higher figure than any other country in the world, according to Johns Hopkins University. New York state alone makes up over 190,000 of those cases, while the death tally in the U.S. from the virus is more than 21,000.
“The various mitigation efforts to contain the spread of COVID-19 seem to be working. What comes next is very much up in the air,” said Marc Chaikin, CEO of Chaikin Analytics. “With the timing of the reopening of the economy now being debated and the economic effects of the engineered shutdown still to be determined, we urge investors to remain wary but watchful as events unfold.”
While equity markets in the United States had one of their biggest weekly gains ever last week, they were hinging on an apparent improvement in the U.S. coronavirus outlook as well as a huge stimulus from the Federal Reserve. The Dow notched its seventh-best weekly performance, rallying 12.7%, while the S&P 500 had its biggest one-week gain since 1974, ramping up 12.1%.