Illustration: Eniola Odetunde/Axios

Stocks rallied overnight in Asia and U.S. stock futures are poised to open higher as markets have shown little impact from news that President Trump was diagnosed with COVID-19 on Friday.

The state of play: Even in the immediate aftermath of Trump sharing the news on Twitter, currency and Treasury markets, which historically have been more attuned to economic and geopolitical upheaval than stocks, had little reaction.

By the numbers: Friday's 1% fall for the S&P 500 was only the seventh biggest decline for the index out of 11 negative sessions in the last month of trading.

  • In fact, two S&P 500 sectors — industrials and financials, which are said to be more sensitive to the overall health of the economy — rallied 1.1% and 0.7%, respectively, on Friday.
  • The 2.2% drop on the Nasdaq was the fourth biggest decline during that period, and was about half the size of two much larger falls on Sept. 3 and Sept. 8 that many market participants chalked up to profit-taking or the unwinding of positions.
  • The Dow had its eighth worst day of the last 30 sessions, declining by less than half a percent.

The intrigue: The CBOE's volatility index, the VIX, rose 4.5% Friday but that increase was less than a third of two other jumps in mid-September.

  • Despite Trump’s diagnosis, futures on the VIX still show traders are far more worried about the time period after the Nov. 3 election.
  • The 2020 election is the most expensive event risk on record, per Bloomberg — with insurance bets on implied volatility six times their normal level, according to JPMorgan analysts.

The big picture: With the Fed expected to keep U.S. interest rates at zero until at least the end of 2023 and to provide additional liquidity to the market should stock prices fall significantly, stock traders seem unfazed by Trump's uncertain health status or the declining likelihood of fiscal stimulus this year.

  • The Fed and other central banks also appear to be in the driver's seat on the movement of government bonds and FX as quantitative easing programs have held yields in a tight range since March.
  • Despite the decline in stock prices on Friday, Treasury yields rose and the dollar weakened, bucking traditional risk aversion patterns.

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Why it matters: "This was the first time such a big listing, the largest in human history, was priced outside New York City," Ant Group founder Jack Ma told the Bund Summit in Shanghai Saturday. "We wouldn’t have dared to think about it five years, or even three years ago."

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