NEW YORK -- The coronavirus outbreak, which started in China and has disrupted business and markets worldwide, is emerging as a black swan event that potentially could deal a serious blow to U.S. President Donald Trump's reelection prospects.
The New York Stock Exchange saw its circuit breaker triggered for the second time this week on Thursday morning following a massive sell-off. This came one day after the Dow Jones Industrial Average entered bear market territory, signaling turbulent times ahead for the American economy as the country just begins to grapple with the outbreak on its shores.
Trump addressed the nation from the Oval Office on Wednesday night, announcing a 30-day entry ban from Europe. Earlier in the day, the World Health Organization declared the coronavirus outbreak a global pandemic.
"The risks of the coronavirus are basically a one-way bet for Trump and it's to the downside," said Todd Mariano, U.S. director at Eurasia Group, a political risk consultancy.
"When you are running for reelection, people are basically voting -- as a referendum -- on your tenure in office, rather than necessarily voting on the merits of your opponent," Mariano said. "A critical part of that, of course, is voters' perception of how the economy is doing and how that is affecting them."
Only a couple of weeks ago, the financial impact of the virus on U.S. companies was mostly confined to those reliant on Chinese supply chains. But as stateside cases mount -- the number has surged more than tenfold in a week -- domestic businesses are now feeling the pressure.
Voters are more likely to cast their ballots based on economic performance in the months immediately before an election -- not over the course of the incumbent's full term. Some scholars have compared this phenomenon to a game of musical chairs.
When the music stops on election day, citizens decide based on where the economy happens to be at that time.
The depth of the economic pain will depend on the severity of the outbreak and the timing of the recovery. But "once people start perceiving -- and I'm sure they will, fairly soon -- some kind of slowdown in the economy, that's going to be tough [for Trump] to turn around," Mariano said.
That would create a political windfall for Trump's chief rival, former Vice President Joe Biden, who is leading the race for the Democratic Party's nomination against Sen. Bernie Sanders.
Both Democratic candidates have slammed the Trump administration's response to the coronavirus and its earlier attempt to cut funding for the Centers for Disease Control and Prevention as well as the National Institutes of Health.
Sanders -- who advocates public health care for all -- held a coronavirus roundtable with experts in Michigan ahead of the state's primary on Tuesday, championing a science-based response to the outbreak and highlighting flaws in the U.S. medical system.
"Theoretically," Mariano said, the virus issue would seem to favor Sanders given his emphasis on health care, "but Joe Biden is not that far behind Bernie Sanders" in terms of his health care policies.
Indeed, Biden went on to beat Sanders in Michigan, where an NBC News exit poll found that 50% of Democratic voters said they would trust Biden the most to handle a major crisis. Thirty-one percent felt that way about Sanders.
Trump, for his part, is in damage control mode.
He appointed Vice President Mike Pence to lead the country's coronavirus task force, and has attempted to calm the markets with tweets and news conferences. Amid the market sell-off on Thursday morning, the president sent out dozens of tweets, often retweeting safety measures issued by experts.
"The Coronavirus has come at a very bad time for the 45th American president," Christopher Wood, global head of equity strategy at Jefferies, wrote in a report Wednesday. "His personal frustration is understandable since only two weeks ago his approval rating was at a record high and the U.S. stock market was also at a record high."
Tim Hagle, associate professor of political sciences at the University of Iowa, said "Trump's strong point has always been the economy."
"And when it tanks -- even if it's not his fault, it doesn't matter, because he is the president, and presidents often get more blame or more praise than they deserve for what is going on," Hagle said. "In this case, if he can't point to a strong economy, then it's going to hurt him and give the Democratic nominee a little bit of a better shot."
This week, the president has been meeting with members of Congress as well as business leaders to coordinate a stimulus package, in which he hopes to include a payroll tax holiday through November -- when the presidential election is scheduled.
But Congress, including many Republicans, has been skeptical of his proposal.
In his Wednesday night address, Trump unveiled financial support for small businesses hurt by the outbreak.
"This is not a financial crisis," Trump stressed.
"We are all in this together," he added. "We must put politics aside, stop the partisanship and unify together as one nation and one family."