The US stock market had another drastic fall on this Wednesday as it wiped out all the gains it had made since the time Trump took over as the President. It is needless to say that the only reason for this is the anxiety around the constant spread of coronavirus in the world.
The DOW index fell by around 1300 points which took it to 19,898.92, its lowest below 20,000 points since February 2017. On the other hand, the S&P 500 dropped 5.2% top end the day with 2398.10 points. The losses on the day briefly paused the stock market. The circuit breaker has been alarmed for the 4th time in 8 trading sessions and this in itself reflects the volatile nature of the market now. Both of these indexes have lost all the gains they had earned. The DOW is left with only 1% gain while the S&P 500, which earned 50% growth since then is now left with only 6%.
The wave of uncertainty and volatility has constantly gripped the market since the outbreak of coronavirus. The border closures and travel ban have further added to the woes of the people and on Wednesday Trump confirmed that border between US and Canada will be closed for non-essential travel. Investors, as well as traders, are in the fear after Whitehouse and wall Street have acknowledged that there is a chance of recession due to this virus mayhem.
As the fear continues to grow, schools and stores are shutting down as well as significant supply chains have been completely stalled. Daily wage earners and small business owners will be the worst hit due to such sudden shutdowns and hence all of this is just too much for the market to bear at this moment. The only way this will slow down is when investors get trusted report that the number of new infected cases are getting lower. Though the number of cases are coming down significantly in China, this is a fact that the cases in other European countries are constantly on the rise. Markets around the world were swept off on Wednesday as the US oil benchmark lost nearly 24% to sell at a rate of $20.37/ barrel. Though the stocks had stabilized a day earlier with the Trump administration offering major financial support to the market, it again crashed on Wednesday. This shows that the fear is real and unless there is a cure to the virus, this will continue to remain so.