The U.S. stock market lost around a quarter of its value in the weeks since President Donald Trump and his top economic advisor, Larry Kudlow, suggested that investors buy equities because coronavirus had been contained in the U.S.
“The Coronavirus is very much under control in the USA,” Trump tweeted Feb. 24. “We are in contact with everyone and all relevant countries. CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!”
The Dow Jones Industrial Index closed that day at 27,960. The S&P 500 closed at 3,225.
Kudlow, the director of the White House’s National Economic Council, echoed Trump’s stock market advice the following day in an interview on CNBC. In a separate interview on the network he said that coronavirus had been “very tightly contained in the U.S.”
“The virus story is not going to last forever,” Kudlow said on CNBC’s on “The Exchange.”
“To me, if you are an investor out there and you have a long-term point of view I would suggest very seriously taking a look at the market, the stock market, that is a lot cheaper than it was a week or two ago.”
Both markets have fallen between 25% to 30% in the weeks since Trump and Kudlow’s advice, largely on news of the global spread of coronavirus.
As of Thursday, more than 125,000 people across the globe — and more than 1,300 Americans — have tested positive for coronavirus. On Wednesday, Trump announced limitations on air travel from Europe to the U.S., triggering a steep sell-off in the markets Thursday morning.
As of Thursday morning, the Dow Jones was at 21,461, marking a 30.3% decline since Trump expressed his rosy view of the markets. The S&P 500, at 2,550, has lost 26.5% of its value. The Dow Jones has lost 26.2% of its value since Kudlow offered his advice, while the S&P has seen a 22.7% skid.