Global equity markets and oil fell sharply on Friday, while gold rallied, after US President Donald Trump said he and the first lady, Melania Trump, had tested positive for coronavirus, sparking a rush to safe-haven assets and a jump in overall volatility.

US futures on the S&P 500 , the Dow Jones Industrial Average , and the Nasdaq 100 traded about 1% to 1.5% lower, suggesting the major indexes would fall at the start of trade later on Wall Street, while oil suffered the heaviest blow, sliding by more than 3%, as investors fled risk-linked assets.

Even the US dollar came under pressure, trading roughly flat against a basket of major currencies, to the benefit of typical safe-haven assets such as the Japanese yen , gold, and US Treasurys.

Trump, who faced off against his Democratic rival Joe Biden in a televised debate Tuesday night, got tested for the coronavirus along with the first lady after his close confidante and White House counselor, Hope Hicks, tested positive earlier this week.


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“News of Trump’s testing positive for Covid-19 test throws a spanner in the pre-election process, as it clearly limits his ability to campaign for the presidency, and the initial negative market reaction market implies that volatility will remain elevated as a result,” ADM Investor Services’ chief global economist, Marc Ostwald, said.

European indexes slipped in early trade, with the FTSE 100 , the DAX , and the CAC 40 all down by 0.5% to 0.6%, led by losses in the chemical, energy, and industrial materials sectors.

The dollar index traded 0.1% up on the day, at about 93.81, having fallen back from an earlier intraday high of 94.03.

Various indicators of volatility a measure of investor nervousness rose sharply. Futures on the VIX index , which reflects options volatility on the S&P 500, were up by nearly 4%, while the V-DAX New an indicator of options volatility on Frankfurt’s DAX index was up 3.7%.

“It seems that the knee-jerk reaction was first to sell USD a little instead, at least until markets can work out exactly how this potentially plays out,” Rabobank strategists said in a note. “Stock futures are certainly going down at time of writing, however. Risk is off there.”

Spot gold was last up 0.1% on the day at $1,908 an ounce, having bounced off an earlier low of $1,889.90 an ounce as the news of Trump’s positive test broke. The yield on the 10-year US Treasury fell 2 basis points on the day to 0.659%, set for its biggest one-day decline in nearly two weeks.

Oil, one of the most sensitive commodities to geopolitics and the economy, plunged by as much as 4% at one point. Brent crude futures were most recently down 3.1% at $39.67 a barrel, while West Texas Intermediate futures fell 3.1% to $37.55 a barrel.

“News that Donald Trump has contracted Covid-19 adds to the bearish pressure,” the SEB chief commodities strategist Bjarne Schieldrop said. “It was always a big wild-card in this election whether one of the candidates would contract C-19 thus placing the candidate on the side-lines.”

Highlighting the investor flight from risk was a drop in cryptocurrencies, with bitcoin down by more nearly 4% on the day, while Ethereum fell by 7%.


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