Mar 9, 2020 - Economy

Trump brushes off coronavirus as reason for stock market plunge

S&P drops 7%

Photo: Timothy A. Clary/AFP via Getty Images

President Trump tweeted Monday that cratering oil prices and "Fake News" caused the stock market's plunge, brushing off Wall Street's increasing anxieties about the novel coronavirus outbreak.

Why it matters: While oil price issues are certainly a significant driver of the market drop, Trump's tweets came after the illness' spread continued to worsen over the weekend across the globe.

  • Trading halted for 15 minutes on Monday morning after the S&P 500's losses hit 7%, marking the first use of "circuit breakers" for the markets implemented after the 2008 financial crisis.
  • The White House's mixed messaging on the illness, which has often been at odds with public health experts, has induced some confusion among businesses and the public on how to better prepare.
  • The president tried to pivot the issue back to the worries of average Americans, stating that "gasoline prices [are] coming down" in another tweet.

Worth noting: "Crude has become a bigger problem for markets than the coronavirus," Adam Crisafulli, founder of Vital Knowledge, told CNBC.

  • "It will be virtually impossible for the [S&P 500] to sustainably bounce if Brent continues to crater."

Between the lines, via Axios' Ben Geman: This appears to be Trump's first effort to manage the politics of the oil price collapse.

  • While the price drop will indeed send gasoline prices down further, it will also bring economic pain to U.S. oil-producing regions where development is expected to slow.

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