The stock market finished lower on Friday after President Trump threatened new tariffs on China over the coronavirus outbreak—claiming that it was created in a Wuhan lab.
The Dow Jones Industrial Average was down 2.5%, over 600 points, on Friday, while the S&P 500 fell 2.8% and the Nasdaq Composite lost 3.2%.
Stock futures fell after President Trump late on Monday claimed to have evidence that the coronavirus was man-made in a Wuhan lab, despite findings from his top intelligence officials saying otherwise.
The president threatened to implement new tariffs on China, with his administration reportedly in the early stages of crafting retaliatory measures over the outbreak, according to Reuters.
Later on Friday, White House economic advisor Larry Kudlow escalated tensions and said that the Chinese will be held accountable for the coronavirus.
Tesla shares plunged over 10% on Friday, after CEO Elon Musk, amid a string of erratic comments on Twitter, said that he thinks the stock price is too high.
Shares of Apple and Amazon fell 1.5% and 7.5%, respectively, after first-quarter earnings showed the negative impact of the coronavirus on both companies, dragging the market lower.
There was some good news late in the day, however: Trump said that Gilead Sciences, which has previously reported “positive data” from its antiviral drug remdesivir, got emergency authorization from the FDA to use it to treat coronavirus.
“Markets are looking past 2021 earnings,” says David Trainer, CEO of New Constructs. “They see the COVID-19 impact as temporary, not permanent.”
What to watch for
“While the market’s reaction to earnings season has been positive to this point, the real test will come in the coming weeks as we begin to hear more from retailers and other companies that have been especially hit hard by the economic shutdown,” according to Bespoke Investment Group.
Despite finishing lower on Thursday, the stock market closed out its biggest monthly surge in over 30 years, with the S&P 500 gaining 12.7% in April while the Dow rose 11.1%.