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As Wall Street extended its deep sell-off on Wednesday over fears about the coronavirus, the Dow Jones Industrial Average at one stage erased the last of the sizeable gains it made under US President Donald Trump, dubbed the “Trump Bump”.
Trump‘s economic package plans failed to tackle the fallout of the coronavirus crisis with the Dow Jones Industrial Average at one stage tumbling more than 10 percent, wiping out the 7 percent gains made since the Republican president took office.
At the end of the trading day, the Dow closed down 1,338 points or 6.3 percent – it’s lowest level since February 2017.
Trump has repeatedly boasted about and taken credit for the stock market’s performance during his three years in office, including as recently as last Saturday after a strong rebound the day before. Trump has also warned that Wall Street would fall if a Democratic candidate wins the November presidential election.
Measuring the stock market’s surge under the Republican president, or Trump Bump, investors became optimistic about Trump’s promises to cut taxes and reduce regulations.
At its February peak, the Dow had surged more than 60 percent from Trump’s election day.
The S&P 500, a broader measure of the U.S. stock market, tumbled more than 9 percent on Wednesday, leaving it up just 8 percent since Trump’s 2016 election and up 2 percent from his inauguration.
Global markets, oil prices tumble
Across the world, equities tumbled anew on Wednesday, with bond and gold prices also falling in an unusual tandem, as markets grappled with the scale of government programmes aimed at softening the economic shockwave from the coronavirus.
Stocks in Europe were also sharply lower and oil prices plunged on Wednesday, with US crude futures hitting an 18-year low, as governments worldwide accelerated lockdowns to counter the coronarus pandemic.
Oil futures have lost more than half their value in the past 10 days as schools have closed, businesses have shuttered and governments worldwide have urged residents to limit gatherings. The decline in the US market in the last 10 days is the largest ever for the contract since it was introduced in 1983.
“The market is cascading. It’s trying to search for a bottom and it doesn’t seem able to find one,” said Gene McGillian, vice president of research at Tradition Energy in Stamford, Connecticut. “There are fears of an economic collapse because of what this virus represents, globally.”
Global oil demand by the end of March could fall as much as 8 million to 9 million barrels per day (bpd), Goldman Sachs said.
(FRANCE 24 with REUTERS)