Friday marked the worst trading day of the year as the Dow plunged 748.63 points, but pharmaceutical companies stood out as an exception, with Pfizer and Moderna stocks rising sharply.
Market reaction to Wuhan study
The market drop coincided with the release of a report from the Wuhan Institute of Virology identifying a new coronavirus, HKU5-CoV-2. The study, published in the journal Cell, sparked concerns due to similarities with SARS-CoV-2, the virus behind Covid-19.
Following the report, Pfizer shares rose 1.54 percent, while Moderna saw a 5.34 percent increase. The gains sharply contrasted with the overall market downturn, with the S&P 500 dropping 1.71 percent, marking its worst day in two months. The Dow Jones Industrial Average saw its steepest decline of the year at 1.69 percent, while the Nasdaq composite fell 2.2 percent.
New virus raises questions, but experts urge caution
The Wuhan study highlighted the virus’s ability to infiltrate human cells, raising alarms about potential risks. HKU5-CoV-2 is linked to bats and uses the same cell-surface protein as SARS-CoV-2. The virus also shares similarities with MERS, which has a fatality rate of nearly 30 percent, though reported human cases remain rare.
Despite the concerns, some health experts say the fears are overblown. Dr. Michael Osterholm, an infectious disease expert at the University of Minnesota, emphasized that immunity to SARS viruses is higher now than before 2019 and that the study itself warned against exaggerating risks.
Other economic factors at play
Market fears were not solely driven by virus concerns. Economists also point to inflation and trade policies as contributing factors. Inflation hit 3.0 percent in January, the highest rate since June 2024. Rising costs for essentials like eggs and fuel oil have added pressure on consumers, and the Federal Reserve is unlikely to lower interest rates while inflation remains high.
Meanwhile, concerns over President Trump’s tariff threats have further shaken investor confidence, adding to the stock market’s turbulent week.
