Futures for the S&P 500 EScv1 slid 1.21 percent by early afternoon in Asia, while Treasury yields also fell.
The US dollar rose, particularly against the British pound, the Australian and New Zealand dollars in a sign of risk aversion.
Trump’s positive could cause a new wave of market volatility as investors brace for the hotly-contested presidential election in November.
“It has the potential to reduce Trump’s campaigning ability. He’s got a lot on and it’s an interruption,” said Sean Callow, currency strategist at Westpac in Sydney.
“It also hurts him as far as the whole narrative that it’s really not much to worry about – it puts the COVID crisis itself back front and centre.”
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10.10am update: FTSE 100 edges lower
The pound at 10am was 1.2948 dollars compared to 1.2897 dollars at the previous close.
The euro at 10am was 0.9051 pounds compared to 0.9115 pounds at the previous close.
9.08am update: US stocks fall more than 1 percent in London
President Donald Trump’s positive coronavirus test triggered a stock market sell-off and a move into government bonds this morning as uncertainty spiked only a month before the US election.
US stock futures fell more than 1 percent in London, while government bond yields slid as investors assessed the impact of the president’s illness and quarantine for financial markets.
Investors, who have driven a long rise in global equity markets, were already nervous given the lack of progress on more US fiscal stimulus.
Stock market volatility gauges rose, with the widely-watched VIX index up to nearly 29 points, from around 27 points on Thursday.
“The President of the United States has got a disease which kills people. People are de-risking because of that,” Chris Weston, head of research at Pepperstone in Melbourne, said Trump’s diagnosis comes at a particularly sensitive point in the election after this week’s acrimonious presidential debate.
“This does damage Trump’s ability to campaign and time is running out before the election,” Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo, said.
Meanwhile, yields on 10-year US Treasury bonds fell more than 1 bps to 0.66 percent, just above a one-month low, a classic signal of investors seeking so-called safe havens.
Risk aversion was evident in the currency markets, with the Chinese yuan traded offshore under particular pressure
8.30am update: FTSE 100 unnchanged at opening
The euro at 8am was 0.9115 pounds compared to 0.9115 pounds at the previous close.
The pound at 8am was 1.2875 dollars compared to 1.2897 dollars at the previous close.