Stocks are getting absolutely crushed on Thursday, as investors run for safety following a Federal Reserve meeting Wednesday that jolted markets, and panic over a fresh wave of the coronavirus pandemic.
The Dow Jones Industrial Average has been battered, down over 1,500 points and plummeting on Thursday, and headed for its worst day since the March sell-off. The S&P 500 and Nasdaq are sinking as well, as coronavirus cases heightened in some states that are resuming business following shelter-in-place restrictions. Stocks across all sectors are mostly all red today, with broad markets having given up a large chunk of the gains from May, as they continue to fall towards the close.
The 30-stock Dow traded over 1600 points lower, or 6%. The S&P 500 sank 5.25% while the Nasdaq Composite tumbled 4.55%. The S&P 500 was headed for its longest losing streak since early March, after poking into positive territory for the year less than a week ago.
The SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) are all battered and bruised Thursday as well.
“The reality is this thing’s going to linger longer than probably the market had through of,” Deming said.
Supportive monetary policy from the Federal Reserve cannot “offset a severe COVID second wave,” said Dennis DeBusschere, macro research analyst with Evercore ISI, in a note. “With TX, AZ, CA new cases and hospitalizations increasing and investors concerned that recent protest will fuel a wave of infections, the risk of persistently weak economic and earnings growth has increased. S&P fair value estimates are falling as a result.”
“The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” the Fed statement said Wednesday.
Former FDA Commissioner Scott Gottlieb explained that states such as Arizona and Texas are simply seeing an uprising of the already rampant coronavirus “never really got rid of the first wave.” He added: “It’s not a second wave.”
Overall coronavirus cases in the U.S. have exploded, reaching 2 million, according to the latest figures from Johns Hopkins University.
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