One must be very careful to take financial news such as "Dow drops 430 points on fears of China corona virus" with a very skeptical eye.
It's possible the headline is accurate. It is also possible people who invest in Dow futures feel a recession is coming and are betting accordingly. It is possible people who invest in Dow futures believe fears of the corona virus will be the catalyst which tips the economy into the recession they believe is coming. Or, people who invest in Dow futures may believe the Dow will decline in the near future for other reasons which have nothing to do with the corona virus.
One of my favorite authors, Nassim Nicholas Taleb, has spent several decades working in the financial markets. He believes financial news (at least the day-to-day kind) is an almost endless repetition of the Correlation Equals Causation fallacy. As he relates in one of his books, he noticed one day the US dollar had declined relative to other currencies in early trading, and the news headline on CNBC/FOX Business/whatever was "Dollar declines due to concerns about Mideast crisis." Later that same day, the dollar rallied and actually rose slightly relative to other currencies. The news headlines were changed to "Dollar rises against world currencies due to concerns about Mideast crisis."
Events in the world happen. Financial markets go up and down. The connection between those two phenomena are often tenuous.
That sure boggles the mind SP. The decline and the rise were both ascribed to the same CAUSE? And people BOUGHT IT? Weird. Thank you for your thoughtful reply. Once upon a time I invested in a SURE THING. It wasn't. I learned my lesson and have not ventured forth again in that snakepit called the stock market. :)
SaltyPebble 