Stocks fell dramatically on Wall Street early Thursday as COVID-19 cases rose anew in the US, crushing recent optimism that the economy was on track for a fast turnaround from its worst crisis in many years.
The Dow Jones Industrial plunged over 1,800 points and the S&P 500 dropped nearly 6 percent, its worst day since mid-March, when stocks had a number of harrowing falls as virus-triggered lockdouts started.
Many market watchers have said a scorching market recovery has been overdone since late March and has not represented the economy's actual dire condition. Around late Monday, the S&P 500 rallied 44.5 percent.
United States President Donald Trump lashed out at the Federal Reserve over Twitter Thursday, a day after central bank chief Jerome Powell laid down a bleak forecast on the country's economy, saying there was a "long road" ahead.
According to Trump, as quoted by Robert Schroeder of MarketWatch, the president sees the figures as well, and "do much better than they do," without mentioning Powell's name. Trump said we'll have "a very good third quarter, a great fourth quarter, and one of our best ever years in 2021."
The market drop comes as the coronavirus rears its ugly head again, with some of the increase likely connected to business reopenings and stay-at-home orders lifting. According to an AP report, cases are increasing in nearly 50 percent of US states, a troubling trend which could escalate as people return to work and venture out during the summer.
For weeks stocks have soared, recuperating steadily from late-winter selloff. The virus outbreak in February and March devastated businesses, but investors soon seemed to shake off the crisis, expecting the economy reopening around the corner.
For the first time ever Tuesday, the tech-heavy Nasdaq Composite cleared 10,000 points. The index skidded more than 5 percent late Thursday.
Greg Boutle, chief of US equity and derivative strategy at BNP Paribas, said there have definitely been indications of volatility "under the surface prior to today." In a report by Tim Balk of New York Daily News, Boutle pointed out that how the market trades in the next couple of sessions is "going to be key to determining whether this does turn out to be a blip."
Small business stocks have continued to bear the load of heavy selling, a gauge that investors are becoming more doubtful about a strong economic rebound. The Russell 2000 index fell to 1,356.22 by 111.17 points or 7.6 percent. Markets across Europe and Asia also retreated.
Meanwhile, bond yields plummeted sharply, a sign of increasing caution among investors. Oil prices also fell 8 percent as investors again worried that fewer resources would be required by a slumping economy.
