US Politics: Coronavirus plagues stock markets, but Trump says US is ready to respond

Trump used the stock market tank as an opportunity to attack Democrats
Trump says the US is prepared to respond to coronavirus

Donald Trump has sought to reassure markets over the spread of coronavirus, which this week contributed to the biggest stock market plunge in two years. Tradefair brings you the latest from US politics...

Because of all we've done, the risk to the American people remains very low."

- Donald Trump

Donald Trump has attempted to reassure US citizens and businesses over the coronavirus outbreak, following a stock market sell-off that wiped trillions of dollars off the main Wall Street indexes this week.

The spread of the novel virus is seen as the key reason behind the market plunge, but Trump also claimed the Democratic presidential debate on Tuesday night (February 25) was a factor.

US health officials have confirmed the first potential community transmission of coronavirus in America, raising concerns that it could be spreading locally within cities and towns. The president has insisted the country is prepared to deal with the outbreak.

Doing a 'great job'

Trump gave a news conference at the White House in which he defended the actions the US government has taken to control the spread of the virus. He also announced that vice-president Mike Pence had been put in charge of managing the country's response to the situation.

"Because of all we've done, the risk to the American people remains very low," the president said.

He also discussed potential funding for efforts to tackle the spread of coronavirus. The White House has proposed making $2.5 billion available for any necessary measures to contain the outbreak, but Senate Democrats have called for more than $8 billion in emergency funding.

Trump said the government is prepared to spend "whatever is appropriate".

"Hopefully, we won't have to spend so much because we really think that we've done a great job in keeping it down to a minimum," he added.

Meanwhile, the latest US coronavirus case was confirmed in California. It was the first instance of the virus in someone who hasn't travelled to an infected area or been in known contact with anyone who has, raising concerns over local community transmission.

Nancy Messonnier, director of the National Centre for Immunisation and Respiratory Diseases at the Centres for Disease Control and Prevention, said community spread within the US is highly likely.

"It's not so much a question of if this will happen anymore, but rather more a question of exactly when this will happen and how many people in this country will have severe illness," she said.

Markets spooked

Wall Street has been well and truly rattled by the escalation of the coronavirus situation, with a recent stock market rally coming to an abrupt and extreme halt this week.

The S&P 500 Index, having climbed to a record high last week, plunged by more than 3% on Monday and lost the same amount again on Tuesday.

According to S&P Dow Jones Indices' senior index analyst Howard Silverblatt, the market lost an estimated $1.737 trillion in value in just two days, CNBC reported.

It wasn't just the S&P 500 feeling the effects, with the Nasdaq Composite falling by 2.8% on Tuesday and the Dow Jones Industrial Average down more than 3%. The sudden collapse meant all three major Wall Street indexes turned negative for the year.

US stock futures on Thursday indicated that Trump's briefing the previous night hadn't reassured investors, with Dow Jones futures down by nearly 400 points at one stage.

In London, the FTSE 100 fell by 2% on Thursday morning.

Trump blames Democrats

Trump used this week's stock market tank as an opportunity to criticise the Democrats running for the party's presidential nomination. He referred to the debate featuring the likes of Bernie Sanders and Elizabeth Warren on Tuesday night, after the worst of the slide had already happened.

"I think the financial markets are very upset when they look at the Democrat candidates standing on that stage making fools out of themselves," he said.

"When they look at the statements made by the people standing behind those podiums, I think that has a huge effect [on markets]."

The president also expressed his confidence that he will win the November election "by a lot", predicting that his victory will cause the stock market to "boom like it's never boomed before".

As far as the race for the Democratic presidential nomination is concerned, Sanders is the current frontrunner and could cement his status in the forthcoming South Carolina primary on Saturday and on Super Tuesday (March 3).

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