Stocks tumble as Covid-19 cases surge and stimulus is nowhere to be found

Financial Markets React To President Trump's Coronavirus Diagnosis
NEW YORK, NEW YORK - OCTOBER 02: People walk by the New York Stock Exchange (NYSE) in lower Manhattan on October 02, 2020 in New York City. Stocks and markets around the world have fallen in morning trading as investors digest the overnight news that President Donald Trump has Covid-19. (Photo by Spencer Platt/Getty Images)

Wall Street is tumbling on Monday as coronavirus, Washington intransigence and earnings weigh on the market.

US stocks sank at the opening bell in New York, and the selloff gathered pace as the session went on.

In the late morning, the Dow was down more than 700 points, or 2.5%. Not a single Dow stock was in the green. The S&P 500 — the broadest measure of the US stock market — fell 2.1%.

The tech-heavy Nasdaq Composite, which had briefly bounced back from its lows, dropped 1.7%.

Energy, industrials and financials stocks are the among the worst performers of the day.

There’s a lot for investors to grapple with: The election is only eight days away, there’s still no new stimulus package and the first look at how the economy fared in the third quarter will be reported on Thursday. Big Tech companies will report earnings this week as well, including Microsoft, Apple, Google, Facebook and Twitter.

While earnings will inject volatility in the tech sector, “on a more macro level, ongoing US stalemate over US fiscal stimulus and the rapidly spreading Covid-19 is going to determine the direction for the wider markets,” said Fawad Razaqzada, market analyst at Think Markets, in a note.

The ever-slimming chance of a new stimulus package before next week’s election isn’t a new factor for the market. And yet, it has been a big driver of the action over the past weeks, even as nothing has really changed as a result of recent negotiations. It shows just how important the recovery is for the market.

On top of that, Covid-19 infections are rising rapidly across Europe, where governments have brought back restrictions to stave off the spreading once again.

All of this is creating a cocktail of uncertainty that the market doesn’t like one bit, and Wall Street opened lower.

European markets were also in the red across the board.