Dow Jones futures plunges 800 points as the market opened in the European session. Analysts are speaking about a future market recession with possibilities of a 25% crash in Dow futures, as the coronavirus fears are spreading.

Dow Jones Industrial Average (DJIA) plunged 800 points in the wake of Monday morning during the early trading hours in the European session. The sudden free-fall of the U.S. stocks is attributed to the increase in coronavirus outbreak alias COVID-19 cases outside mainland China.

As the coronavirus outbreak-heat start being felt by stock markets, Cebile Capital analyst, Sunaina Sinha Haldea, thinks it is just the beginning of a huge free fall of about 20-25% awaiting the stocks market.

The coronavirus has started looking more dangerous than it initially posed after Xi Jinping said that Covid-19 has not yet been contained and the government has not responded to the threat as its potentiality dictates. Italy as of Monday morning recorded confirmed cases of COVID-19 up to 152, leading to a total lock-down of about 50,000 people in the northern region around Milan.

South Korea is another country that has recorded a high number of confirmed cases at the time of reporting, with a total number of 600 victims. Without any international health body coming forward with a solution to the world demographic threat, the investors continue falling into the trap of paranoia, which has resulted in the free fall in the US stock market.

Other major stock markets that were affected include the S&P 500 futures and also Nasdaq composite Futures that saw a 2.56% and 3% drop respectively.

Effect of Coronavirus on Dow Jones Futures Points

Dow Jones started the week on a negative pace, however, the drop was a continuation of a new trend that is forming on the Dow Jones points level. Since China was hit by the deadly virus, COVID-19, fears have dominated in the investors’ mind making the stock market lose an upward pace.

However, the stocks free fall did not start looking serious until last weekend when cases of confirmed coronavirus revamped outside China. The market has experienced a strong resistance zone at the level of 29,500, after respecting a head-and-shoulders pattern on the higher time frames.

With the points level having broken below the support level at 29,000, and the coronavirus continue pushing the health sector at a corner, the Dow Jones futures will continue bleeding out.

According to the Bank of America, any drop below 1.4% would a tipping point for recession potential. As the coronavirus continues ravaging mankind, the global economy risk hitting trillion in losses. However, the safe haven industry like precious metals and crypto industry might be the biggest beneficiaries as their demand continues rising fast.