Dow futures tumbled 500 points as Trump said he tested positive for Covid

Dow futures tumbled 500 points as Trump said he tested positive for Covid
Stock futures plunged early in morning trade on Friday after President Donald Trump said he had tested positive for the coronavirus.

Futures linked to the Dow Jones Industrial Average fell 500 points. The S&P 500 and Nasdaq 100 futures were also in negative territory.

Meanwhile, the yield on the 10-year Treasury fell to 0.6578%. Yields move at opposite prices.

Earlier, investors watched the stimulus developments after the House of Representatives approved a $ 2.2 trillion coronavirus stimulus plan Thursday evening, although Democrats and the Trump administration remained divided on key provisions of the legislation.

It is likely that the bill will not pass through the Republican-controlled Senate and will become law. Senate Majority Leader Mitch McConnell has opposed the legislation as his party resists spending trillions more on the federal response to the pandemic.

House Speaker Nancy Pelosi and Treasury Secretary Stephen Mnuchin met earlier on Thursday in a last-minute attempt to seal a deal for another coronavirus relief package, but they remained at odds.

Chris Zaccarelli, chief investment officer at the Association of Independent Advisors, told CNBC that markets are enjoying surprising resilience ... in the absence of actual progress in stimulus. He added, "It is clear that the markets are watching what happens between Minister Mnuchin and Speaker Pelosi, and I think they are cautiously optimistic that some kind of consensus will be achieved."

Shares rose on Thursday, after the Dow Jones and Standard & Poor's both spent some of the session in negative territory.

The Dow closed 35 points higher, gaining 0.1%, while the S&P 500 advanced 0.5%. The high-tech Nasdaq Composite was relatively better, rising 1.4%.

On Friday, investors will get a reading on the state of the ongoing economic recovery when the September jobs report is released at 8:30 AM ET. The final jobs report ahead of the election is expected to show a slowdown from August levels. Economists polled by the Dow Jones expect to add 800,000 nonfarm jobs, down from 1.37 million in August.

Stocks have posted a record rebound since the economic shutdown pushed stocks lower in March. But all major averages all ended lower in September, snapping a five-month winning streak as doubts surfaced about the pace and breadth of the recovery.

Zacarelli indicated that while there appears to be a floor underneath the stocks, if the market is to continue moving up until the end of the year, there needs to be strength from other areas of the market.

“In order for the market to really rally for the rest of the year, we really need to see some participation from the cyclical sectors,” he said, citing the industrial and financial sectors in particular.

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