Wall Street is trading sharply lower amid concerns about the future of the economy and a second wave of coronavirus

Global stock markets suffered heavy losses on Thursday after the United States Federal Reserve warned of a “highly uncertain” economic outlook due to the coronavirus pandemic, and investors worried about a possible second wave of the deadly disease in the United States.

On Wall Street at 15 GMT the Dow Jones lost almost 3.6% moments, the index S&P 500 down 2.9% and the technological Nasdaq lost about 2%.

A similar decline was experienced by key eurozone markets. At the same time, the 4.3% drop in Madrid stood out, while Paris fell 3.8%; Frankfurt 3.4%; Milan 4.5%; London 4.5% and the Euro Stoxx 50 index 3.6%.

That followed massive sales in Asia after the United States Federal Reserve warned that the world’s leading economy would take time to fully recover from the worst global emergency in generations.

In a statement, he said that the crisis “poses a considerable risk to the medium-term economic outlook ”, forecasting a contraction of 6.5 percent this year and unemployment of 9.3 percent.

At the same time, Treasury Secretary Steven Mnuchin deemed it necessary to approve new tax aid.

“Hangover”

“A combination of a post-FOMC hangover and reports of a substantial increase in the virus case count in Texas have left runners at risk.”said Stephen Innes, global strategist at AxiCorp.

California, Florida and Texas reported new spikes in COVID-19 infections.

“The jumps in new daily cases … immediately raised concerns about a possible second round of infection in the country, which inevitably affects market sentiment towards riskier assets,” ActivTrades analyst Pierre Veyret said.

Shares worldwide have been rising for several weeks as blockade measures ease in key regions, and after governments and central banks pledged trillions of dollars in support to boost growth, sparking investor optimism.

“The market went too far”, Markets.com analyst Neil Wilson said.

In the meantime, another 1.54 million US workers applied for unemployment benefits last weekthe Labor Department said Thursday, bringing the total from mid-March to 44.2 million.

Oil prices fell after data showed that US supplies increased 5.7 million barrels last week, reliving demand concerns despite blockades.

The price of Texas intermediate oil (WTI) opened this Thursday with a fall of 7.07%, to 36.80 dollars a barrel, while the Brent, benchmark in Europe, for delivery in August lost 3%.

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