The U.S. stock market has received a huge blow due to the ongoing coronavirus outbreak (COVID-19) outside mainland China. In just two days, the sell-off wiped out more than $1.7 trillion from the market value, a rare case that was observed four years ago.
According to an indices analyst, most investors who had their money in the stock market fled the riskier assets due to the fears of slowdown on the global growth, which is being caused by the deadly COVID-19.
On Tuesday, the equity benchmark lost approximately $810 billion in market value while on Monday it had lost $927 billion. According to Dow Jones senior analyst Howard Silverblatt, the stock value has lost $2.138 trillion since last Wednesday’s high.
At the time of writing this article, the S&P 500 was trading at 3129 points, with the downtrend dominating the higher time frames. Having broken the previous resistance level at 3225, if the coronavirus ripple effect is not contained soon enough, the stock market may continue bleeding out.
Coronavirus and the Stock Market
Over the weekend, the deadly COVID-19 evolved its demographic infections after high cases of confirmed victims were recorded in Italy and also in South Korea. Actually, at the time of writing, South Korea had confirmed slightly over 1000 cases and 11 fatalities. On the other hand, Italy’s number of confirmed cases rose from the previous official report of 152 on Monday evening to 323 cases by Wednesday morning, with 11 fatalities already confirmed.
As the number of confirmed cases continues rising outside mainland China, investors continue having the phobia of waiting or holding in the stock market. Previously, President Donald Trump assured Americans that the virus is under control where his government allowed the Americans living and affected in Japan to be repatriated and quarantined in America. In his statement, he also said that he had approved $2.5 billion to assist in the process and also finding a vaccine of the deadly coronavirus.
However, not all were satisfied with the assurances as the stock market continue bleeding due to the fears of the unknown from the COVID-19. To give the investors hope, the President of the Federal Reserve Bank of Dallas Robert Kaplan, said that it’s too soon to call for an interest rate change in the light of coronavirus outbreak.
He added that ‘I still think we are a number of weeks away from being able to make the judgment, we are still in the heat of this and there is just a lot of uncertainty.