BOSTON (Reuters) – Stock markets, oil prices and the dollar all slid on Thursday after President Donald Trump raised the possibility of delaying the November U.S. election and new government data underscored the coronavirus’ deep economic impact.
Trump, without evidence, repeated his claims of mail-in voter fraud and raised the question of a delay, writing in a post on Twitter, “delay the election until people can properly, securely and safely vote???”
“It’s moved the market, for sure,” said Priya Misra, head of global rates strategy at TD Securities in New York. “Not only do we have uncertainty about who wins, I think we have uncertainty about the process.”
A report on additional jobless claims and collapsed gross domestic product had already set Wall Street up to open lower.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 45 nations, fell 6.24 points or 1.1%, to 549.23.
On Wall Street, the Dow Jones Industrial Average .DJI fell 357.63 points, or 1.35%, to 26,181.94, the S&P 500 .SPX lost 34 points, or about 1%, to 3,224.44, and the Nasdaq Composite .IXIC dropped 61.21 points, or 0.58%, to 10,481.74.
Dismal earnings reports and weaker-than-expected German GDP data added to an already sour mood in Europe, with the STOXX 600 slipping about 2.25%.
Earlier gains in Asian shares were undone, with MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closing 0.17% lower, while Japan’s Nikkei .N225 lost 0.26%.
U.S. gross domestic product collapsed at a 32.9% annualized rate last quarter, slightly less than expected, but still the deepest decline in output since the government started keeping records in 1947, the Commerce Department said on Thursday.
“The fact that it was better than expected maybe is a good thing, but certainly not much better, and it’s still a terrible number,” said Randy Frederick, vice president of trading and derivatives with the Schwab Center for Financial Research.
The worries came despite news on Wednesday that all U.S. Federal Reserve members voted as expected to leave the target range for short-term interest rates between 0% and 0.25%, where it has been since March, and use its “full range of tools” if needed.
Investors must now watch negotiations in Washington, DC over a new coronavirus relief package for the world’s largest economy.
U.S. President Donald Trump said on Wednesday that his administration and Democrats in Congress were still “far apart” on a new coronavirus relief bill. A failure to agree risks letting a $600-per-week unemployment benefit lapse when it expires this week.
In currencies, the dollar index .DXY, which tracks the greenback versus a basket of six major currencies, fell 0.119 points, or 0.13%, to 93.334, and remains on course for its worst monthly performance in a decade.
The dollar =USD has fallen on expectations the Fed will maintain its ultra-loose monetary policy for years to come and on speculation it will allow inflation to run higher than it has previously indicated before raising interest rates.
The dollar’s weakness has further supported the euro EUR=, which was down 0.07% at $1.1782.
Treasuries Benchmark 10-year notes US10YT=RR rose 11/32 in price to yield 0.5446%, from 0.581% late on Wednesday.
Oil prices fell amid concern that surging coronavirus infections worldwide would jeopardize a recovery in fuel demand. [O/R]
U.S. crude CLc1 recently fell 3.63% to $39.77 per barrel and Brent LCOc1 was at $42.49, down 2.88% on the day.
Spot gold XAU= dropped 1.5% to $1,941.23 an ounce.
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