As more European countries, including Austria, Spain, and Croatia, reported cases of COVID-19, the pathogen associated with the coronavirus outbreak, the U.S. stock market fell again, on Tuesday morning. By noon, the Dow Jones Industrial Average was down almost three hundred points, or about one per cent, following its thousand-point slump on Monday.

This fall in stock prices was an accident waiting to happen. After a ten-year bull run, the S. & P. 500 index rose a whopping 28.9 per cent in 2019 and continued to reach new highs until early February. Investors appeared to be shrugging off the alarming news about the spread of the coronavirus inside and outside of China, but the sang-froid was never likely to last. It crumbled over the weekend, amid reports of people getting sick in places as far afield as Egypt, Italy, and the United Arab Emirates.

The rising death toll of the coronavirus is primarily a human tragedy, of course. And, as Tedros Adhanom, the director-general of the World Health Organization, pointed out on Monday, the news isn’t all bad. For a couple of weeks now, the number of newly diagnosed cases of COVID-19 has been falling inside China, as the government’s draconian measures appear to have taken effect. But investors are focussing on the possibility of the virus spreading around the world. “We now consider this to be a pandemic in all but name, and it’s only a matter of time before the World Health Organization starts to use the term,” Bharat Pankhania, an expert on communicable diseases at the University of Exeter, in England, said on Monday.

Monday’s drop in the Dow didn’t rank in the index’s top-twenty daily moves in terms of percentage. But it was the Dow’s third-biggest single-day points decline ever, and it was large enough to get the attention of Donald Trump, who was making a state visit to India. Forty-five minutes after the market closed—at 3:15 A.M., India time—he tweeted, “The Coronavirus is very much under control in the USA. 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!”

Trump places a lot of emphasis on the market, of course. It was predictable, and understandable, that he would try to project an aura of calm. Behind the scenes, though, he has “voiced his own anxieties, rebuking public health leaders over last week’s decision to fly home 14 Americans who tested positive for the virus while aboard a cruise ship in Japan,” as Politico reported on Friday. According to the Washington Post, Trump “again became irate after learning over the weekend that federal officials planned to house some coronavirus patients in an Alabama facility despite protests from local officials.”

From a political perspective, the virus presents two threats to the President. If COVID-19 spreads inside the United States, the White House could be held responsible for botching its response to the virus’s outbreak. Democrats are already sharpening their knives. “The Trump Administration has been asleep at the wheel,” Chuck Schumer, the Senate Minority Leader, said on Monday, on the Senate floor. “President Trump, good morning! There’s a pandemic of coronavirus. Where are you?”

The other threat to Trump is an economic one. If the stumble in the stock market is a one-off event, it won’t have much impact politically. But, if Wall Street goes into an extended slide, or if the broader economy gets hit badly as the virus spreads, it could change the political environment going into the election.

On Monday, MasterCard and United Airlines joined Apple and other multinational corporations in announcing that the emergency measures which China and other countries have introduced—and also the disruption to the international transport of commodities and people—are already adversely affecting their businesses. Among Wall Street economists, however, the consensus is still that the over-all impact on the U.S. economy will be relatively limited. The economics team at Goldman Sachs reckons that the fallout from the virus will reduce annualized economic growth in the first quarter of 2020 by about 0.8 per cent, but it also predicts that most of this decline will be made up later in the year, as the situation stabilizes and activity rebounds.

This sort of analysis reflects the fact that the vast U.S. economy is more like a supertanker than a sailboat, and that it takes something both dramatic and persistent to knock it permanently off course. Even after 9/11, when the country was traumatized and airlines were grounded, the economy rebounded in short order. Other advanced economies have also demonstrated an ability to recover pretty rapidly from man-made and human disasters.

However, the coronavirus isn’t a one-time shock like 9/11: the reality is that nobody really knows how severe the health crisis will become or what impact it ultimately will have on the economy. In a filing with the Securities and Exchange Commission, United said that “the range of possible scenarios is too wide to provide earnings guidance at this time.” The economists at Goldman Sachs warned that “the risks are clearly skewed to the downside until the outbreak is contained.”

In Republican circles, the phrase of the moment is “black swan”—a term for low-probability events that have hard-to-predict effects. “The view in the White House is that this is one of those classic black swan events, and all we can do is control the health issues in the U.S.,” Stephen Moore, a conservative economic analyst who is close to the Administration, told Politico. Spencer Zwick, a veteran Republican fund-raiser, said to the Washington Post, “We’ve always said that the president has a better shot of being reelected in a good market, but there is talk of whether there could be a black swan event that changes things.”

Some investors and analysts are already speculating about the Federal Reserve cutting interest rates again, in order to shore up the economy. Policymakers aren’t due to meet again until March 17th, though. If the stock market falls much more between now and then, Trump will surely renew both his attacks on the central bank and his calls for lower rates. He may even go further. But, whatever happens, we have just been reminded that politics, like life, is full of uncertainty.

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