U.S. markets and stock exchange traded funds continued to pull back on Thursday as ongoing weakness in employment and a spike in coronavirus cases in Europe weighed on sentiment.

On Thursday, the Invesco QQQ Trust (NASDAQ: QQQ) dropped 1.3%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was down 0.2% and iShares Core S&P 500 ETF (NYSEArca: IVV) fell 0.5%.

Initial claims for state unemployment benefits was at a seasonally adjusted 898,000 for the week ended October 10, compared to 845,000 in the prior week, Reuters reports. In comparison, Economists forecasted 825,000 applications in the latest week.

“Going into the fall it will be difficult for unemployment to make a lot of positive headway because of the lack of stimulus,” Christopher C. Grisanti, chief equity strategist, MAI Capital Management, told Reuters.

Uncertainty over the coming elections and the on-again off-again stimulus negotiations have disappointed investors.

“The back and forth on the pre-election stimulus program has gone from a lot of optimism to a lot of pessimism,” Jim McCormick, global head of desk strategy at Natwest Markets, told the Wall Street Journal. “And we are seeing setbacks on the vaccine and a general pessimism about the worsening Covid situation in Europe.”

The markets are also reflecting indecision as many refrain from large bets until after the election once contested results have been cleared up.

“We are in this holding pattern where I think the market is realizing the Democratic sweep is becoming more likely,” McCormick added. “But because of the experiences of 2016, there is a lot of hesitation to price things in.”

Further adding to the global uncertainty, Europe is suffering from a resurgence in Covid-19 cases. London was the latest European capital to enforce lockdown measures. France has already declared a state of emergency and enacted nightly curfews for the Paris region and eight other metropolitan areas.

“We have done the easy bit of the economic recovery, the initial rebound. Now we have got to do the hard yards of getting economies back to where they were before lockdown, before Covid,” Altaf Kassam, EMEA head of investment strategy and research at State Street Global Advisors, told the WSJ. “These rolling lockdowns are going to crimp that recovery and make it so much harder.”

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