Investments

Coronavirus Decimates US Stock Market $1.7T In 48 Hours

U.S. stock market, coronavirus, s&P

The U.S. stock market is spiraling downward, with the S&P 500 losing $1.737 trillion during a massive sell-off prompted by mounting fears over the coronavirus, according to multiple reports on Wednesday (Feb. 26).

The Dow Jones industrial average sank 879 points on Tuesday (Feb. 25) as investors grew anxious about news that the virus was spreading. The Dow’s two-day, 1,900-point drop was the worst two-day percentage loss in two years.

The Nasdaq dropped 8.6 percent from a Feb. 19 high. The S&P 500’s two-day loss of 6.3% was the largest for the benchmark since August 2015, when the Chinese government devalued the yuan amid the U.S.-China trade war.

A number of companies — Hasbro, Mastercard, Nike, United Airlines — have said that they think the impact of the virus will negatively affect corporate earnings. Apple said it won’t hit projected earnings. 

“We are finally starting to see the markets react to the coronavirus,” Nicole Tanenbaum, chief investment strategist at Chequers Financial Management, told the Washington Post. “There has been a lot of complacency in the market and a sentiment-driven rally that hasn’t taken into account that this virus may not be as contained as we hoped it would be.”

The coronavirus outbreak has sickened more than 81,800 people, according to official counts. As of Wednesday (Feb. 26) morning, at least 2,766 people have died, all but 51 in mainland China. There are 57 cases in the U.S., and officials from the Centers for Disease Control and Prevention, the National Institutes of Health, and other agencies said that they no longer viewed its domestic spread in terms of “if” but rather “when.”

“This is very tightly contained in the US,” White House economic adviser Larry Kudlow told CNBC. “I think this thing will run its course and the U.S. is in excellent shape.”   

JPMorgan Chase CEO Jamie Dimon told CNBC on Tuesday (Feb. 25) that “we’ll just have to wait and see” what the fallout is from the coronavirus.

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