Stocks Are Dropping as the Election Nears, Giving Trump a Headache in Florida

Stocks have had a bad start to the week. A new barrage of COVID-19 infections sweeping the country has dented investor confidence in a swift economic rebound from the ongoing pandemic.

Nerves on the stock market are also frayed ahead of the presidential election on November 3 and due to delays over a new economic stimulus bill.

President Donald Trump has touted the market's bull run in recent years as a testament to his success at the White House and indexes have climbed since the initial shock sell-off of March, as government's introduced more measures to tackle the coronavirus.

However, just six days before Election Day it appears that jitters have returned.

The S&P 500, Nasdaq and Dow were all down by more than 2.5 percent in morning trading in the U.S. The story was similar in European markets, as new lockdown measures loom across the Atlantic.

On Wednesday, the Vix index, which measures market volatility, hit its highest levels since June.

It comes as the number of Covid-19 cases have risen at a rapid pace in the U.S. during recent weeks. More than 74,000 new cases were recorded on Tuesday, as the total number of recorded infections heads closer to the 9 million mark.

David Madden, market analyst at CMC Markets told website MarketWatch earlier today that traders often study hospitalization figures because significant rises have often triggered the introduction of tougher restrictions.

"In 36 states, the hospitalization rate for the coronavirus increased by at least 5% over in the past seven days," he said.

The state of markets and investments could be a key issue for voters in Florida, a key swing state with 29 electoral votes.

More than 20 percent of Floridians are over the age of 65, and a large proportion are living off investments and retirement funds. Previous election data have consistently shown these older voters are more likely to turn out in an election than younger voters.

The state of people's investments on Election Day could end up being a key factor in swinging already close polls.

Trump's handling of Covid-19 will be another key issue on the doorstep, with older people being more vulnerable to its symptoms and at a greater risk of dying from the disease.

Some pundits have suggested that Trump's entire re-election hopes hinge on winning the Sunshine State.

Both Democratic and Republican campaigns have recognized the state's importance, and the significance of older voters. Trump hosted a rally in Orlando on Friday and former Democratic President Barack Obama traveled to Miami on Saturday to mark the first day of early voting.

As of October 23, more than 4.7 million Floridians had already cast their votes, a tally which surpasses the total number of votes cast for Trump in the state during the 2016 election. That number represents roughly 33 percent of all registered voters in the state.

Polling suggest Democratic hopeful Joe Biden holds a narrow lead over Trump in Florida. According to FiveThirtyEight's poll tracker, the former vice president leads by an average of just 3 percentage points.

A recent University of North Florida poll, which surveyed 863 registered likely voters in the state, shows Trump trailing Biden by just one point, 47 percent to 48 percent respectively.

Donald Trump in Florida
President Donald Trump speaks during a rally in Pensacola, Florida, on October 23, 2020. With less than one week before the general election, President Trump is hoping to close the gap between him and Democratic presidential candidate former Vice President Joe Biden. Jonathan Bachman/Getty Images