The rapid upswing in the US indices following the tentative peak of the coronavirus pandemic has been severely dampened. The US leading index Dow Jones Industrial plummeted Thursday by 6.9 percent to 25,128 points and was thus at the level of the end of May. It was the largest percentage daily loss on a closing price basis since March. In the meantime, the Dow would have almost dropped below the 25,000 mark.
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The US Fed’s gloomy economic outlook and fear of a second wave of corona had previously weighed on the global stock markets. For example, the German DAX had already fallen by 4.5 percent to 12,000 points.
Fed chairman Jerome Powell had already spoken clearly in the middle of the week in the face of the severe economic crisis resulting from the corona pandemic. He said that a significant portion of the job losses could be permanent. According to the U.S. Department of Labor, another 1.54 million people had registered as unemployed last week.
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At the same time, new infections rose again in some southern US states such as Florida and Texas. The British analyst house Pantheon is therefore already anticipating new corona restrictions in parts of the United States. That should further depress economic forecasts.
For the broad US index S&P 500, there was already a decline of around 5.9 percent to 3002 points. The technology-heavy Nasdaq 100 now collapsed by about five percent to 9588 points. All three US indices had previously peaked after the deep crash in March.
The U.S. government is refusing another lockdown on a possible second wave of coronavirus infections. “We can’t shut down the economy,” Treasury Secretary Steven Mnuchin told CNBC. “I think we learned that if you shut down the economy, you can do more damage,” said the minister.
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US President Donald Trump, on the other hand, sees the economy in his country on the right track. The Fed’s forecast is “wrong”. Trump predicted a “very good third quarter, a great fourth quarter, and one of our best years 2021”. That was his opinion.
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