Dow falls over 1100 points as coronavirus fears rise
The Dow Jones and S&P 500 are on track to suffer their worst week since the 2008 financial crisis as global markets react to the coronavirus outbreak.
The Dow Jones and the S&P 500 are likely to suffer their worst week since the 2008 financial crisis as investors concerns about the coronavirus outbreak rise.
On Thursday, the Dow Jones closed 1162 points lower, with the benchmark down more than 3100 points since the start of the week. Meanwhile, the S&P 500 closed 139 points lower on Thursday, with both indices down more than 10% this week.
US stocks are still far off from being labelled a bear market, which is defined as a 20% or more fall in value below the most recent peak.
Looking to trade the Dow Jones and other major indices? Open a live or demo account with IG today.
Outside the US, the FTSE 100 continues to slide with the blue-chip index down 300 points in early morning trading on Friday, representing a decline of more than 10% since the start of the week.
Global equities have traded lower over the last five days, with investors growing increasingly concerned about the spread of the coronavirus.
You can go long or short with IG using derivatives like CFDs.
Safe haven investments surge amid sell-off
Safe haven investments like bonds continue to surge in value, with the 10-year US Treasury bond yield falling to a new all-time low of under 1.28%, sending its price higher.
Meanwhile, analysts from Bank of America (BoA) believe that gold prices could rally as high as $2000 an ounce. However, BoA opted to leave their official target price unchanged at $1700.
Gold is trading at $1629 at the time of publication.
‘It is worth keeping in mind that our bullish base case outlook is not necessarily predicated on the Wuhan virus,’ Michael Widmer precious metals analyst at Bank of America Securities said. ‘Indeed, we believe that the yellow metal is supported by several structural, i.e., longer-term, dynamics.’
In his opinion factors outside of the coronavirus, particularly a ‘de-globalisation’ movement, will continue to weigh on global economic growth and help support gold prices.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
