The Dow was scheduled to collapse 650 points or 2% on Thursday, when U.S. futures increased the decline. Futures for S&P fell 1.8% and Nasdaq futures fell 1.3%. U.S. oil prices fell 4%.
An increasing number of coronavirus cases in the United States have upset Wall Street. A second wave of infections could force many companies to close again as soon as they reopen.
Federal Reserve Chairman Jerome Powell said Wednesday that the economic future is very uncertain. While acknowledging that May’s work report is a welcome surprise, he noted that many millions of Americans will never return to their jobs and could lose their jobs for years.
The coronavirus could permanently change many parts of the economy, and Fed economists predict unemployment will remain high for several years. While Powell and the Fed also expect to keep their foot on the stimulus pedal for a long time to come – usually the main stimulus to corporate bottom lines and stocks – the forecast forecast has shaken investors.
As countries across the country reopen their economies, people are forced to live alongside the virus. A closely observed model of coronavirus from the Institute of Health Metrics and Evaluation of the University of Washington was updated on Wednesday, and it is now projected that by October 1, there will be nearly 170,000 coronavirus deaths in the United States.
“If the U.S. cannot check growth in September, we could face worsening trends in October, November and the coming months if the pandemic is expected to follow the seasonality of pneumonia,” IHME Director Dr Christopher Murray said in a statement.
The number of global cases also continues to rise, with nearly 7.4 million confirmed infections reported, according to Johns Hopkins University. Brazil, Russia, the United Kingdom and India have the most cases after the United States. More than 415,000 people worldwide have died.
But the increasing number of coronavirus cases in the United States, along with the appalling economic forecasts of experts, including the US Federal Reserve, suggest constant pain to companies and workers. Lean prospects are now increasingly difficult to ignore.
Stephen Innes, AxiCorp’s chief global markets strategist, said Thursday that markets are having trouble digesting headlines that point to new virus epidemics in the United States. “A secondary outbreak is not something to whine about,” he said.
The Federal Reserve announced Wednesday that it is unlikely to raise interest rates this or next year. Even in 2022, most central bank policy makers believe that rates will remain at current rate rates.
“We’re not thinking about raising rates – we’re not even thinking about raising rates,” Fed President Jerome Powell told reporters during a news conference.
The Fed does not expect economic difficulties to stop any time soon: it has updated its projections for the year predicting a 6.5% drop in gross domestic product, the broadest measure of the economy in 2020.
The central bank acknowledged the “enormous human and economic hardships” caused by the pandemic. By December, the Fed expects the unemployment rate to fall to 9.3%, from 13.3% in May, but still well above 3.5% in February. Millions of people won’t get their old jobs, ”and maybe won’t find them for a while,” Powell said.
– Faith Karimi, Arman Azad, Joe Sutton and Anneken Tappe contributed to the reporting.