- US stocks tanked on Thursday as cautious commentary from the Federal Reserve and rising coronavirus infection rates prompted investor concern.
- Texas, Florida, Arizona, and California all reported strong upticks in case counts or hospitalizations, increasing fears of a second wave of COVID-19 infections.
- The Federal Reserve said on Wednesday that the pandemic could result in permanent economic damage and an extended period of high unemployment.
- Oil dove as well, with West Texas Intermediate crude trading as much as 8% lower.
- Watch major indexes update live here.
US equities plummeted on Thursday as investors grew warier of rising coronavirus case counts and mulled cautious commentary from the Federal Reserve.
A much-feared second wave of COVID-19 infections is becoming likelier in some states as reopening efforts continue. Texas reported its third straight day of record coronavirus hospitalizations, while Florida notched its worst weekly increase in cases. Arizona and California also revealed spikes in new cases. The surging case counts pushed the US total above 2 million.
Traders also weighed Fed Chair Jerome Powell’s comments on Wednesday; he said the pandemic could result in permanent economic damage and an extended period of high unemployment. He cautioned that, despite May’s better-than-expected jobs report, “it’s a long road” to a labor-market recovery.
Still, the Fed signaled a willingness to continue economic stimulus efforts, saying it would leave rates near zero and continue multibillion-dollar bond purchases.
Here’s where US indexes stood at 2:50 p.m. ET on Thursday:
Weekly jobless-claims data released on Thursday backed up Powell’s sentiment. Roughly 1.5 million Americans filed for unemployment insurance last week, the Labor Department said. The reading brought the 12-week total to 44 million. Continuing claims, or the number of Americans receiving unemployment benefits, slid slightly from the previous week, to 20.9 million.
Some of the day’s biggest losers were those that gained the most on reopening hopes. Carnival Cruises, Royal Caribbean, and Norwegian Cruise Line plunged in early trading. Airline stocks including Delta, American, and United slid sharply as well. Gap and Kohl’s were among the biggest losers in the retail sector.
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Early moves in the Cboe Volatility Index mirrored the stock market’s sharp downturn. The VIX, known as the stock market “fear gauge,” spiked as much as 12.7% early Thursday, breaching 30 for the first time since late May.
Oil tanked through the session amid the wider risk-off attitude. West Texas Intermediate crude sank as much as 8%, to $36.4 per barrel. Brent crude, the international benchmark, slumped 6.6%, to $38.96, at intraday lows.
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