U.S. stock futures drop after Trump fails to reassure traders

U.S. stock futures fell Wednesday night, after a news conference by President Donald Trump failed to reassure investors and as a new case of coronavirus with no known origin was discovered in California.

Dow Jones Industrial Average futures YM00, -1.36%  sank more than 300 points, and S&P 500 ES00, -1.37%  and Nasdaq Composite futures NQ00, -1.36%  were also off by more than 1%.

“There’s no reason to be panicked,” Trump said Wednesday evening at a White House press briefing, as he downplayed the risks and said the nation is well-prepared for a possible COVID-19 outbreak. He also announced Vice President Mike Pence has been put in charge of the country’s outbreak response.

Meanwhile a new coronavirus case was confirmed in Northern California, the first in the U.S. by someone who hasn’t traveled to infected areas or been in known contact with anyone who has, raising the worrisome prospect that the virus is spreading by other means.

“President Trump’s press conference was certainly intended to be a confidence builder but I don’t believe it will have much impact on stocks,” Kristina Hooper, chief global market strategist at Invesco, told Bloomberg News. “The drop in futures illustrates that words from politicians are meaningless. I believe it will take assurances from the Fed to send futures in the opposite direction.”

Jeffrey Halley, senior Asia Pacific market analyst at Oanda, wrote in a note: “President Trump finally addressed the arrival of coronavirus on U.S. shores, and the government’s response to controlling its potential spread. . . .Neither inspired an already shaky North American market.”

Stephen Innes, chief market strategist at AxiCorp, had a grim prediction as he addressed the new Calfornia case, in a note: “If this virus spread intensifies stateside, it will most definitely be the straw that breaks the market back.”

Earlier Wednesday, Microsoft Corp. MSFT, +1.25%  warned it won’t meet its quarterly forecasts due to the effects of the outbreak, likely signalling more widespread guidance misses across the tech industry.

On Wall Street, the Dow and S&P 500 index fell for a fifth straight day on continued fears of the coronavirus outbreak’s impact on global economic growth. The Dow Jones Industrial Average DJIA, -0.46%  fell 123.77 points, or 0.5%, to settle at 26,957.50, marking the worst five-day point drop for the blue-chip index on record. The S&P 500 SPX, -0.38%  shed 11.82 points, or 0.4%, to close at 3,116.39, while the Nasdaq Composite COMP, +0.17%  added 15.16 points, or 0.2%, to close at 8,980.77, snapping a four-day losing streak.

Asian markets continued to fall Thursday, with Japan’s Nikkei NIK, -2.14%  down 2%, Hong Kong’s Hang Seng HSI, -0.81%  off 0.7% and South Korea’s Kospi 180721, -0.98%  slipping 0.7%.

After falling for a fourth consecutive session Wednesday, oil futures continued to drop overnight, with West Texas Intermediate crude for April delivery CLJ20, -1.48%  and Brent crude, the global BRNJ20, -1.33%  down more than 1%.

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