US Stocks Plunged On Re-opening Warning, Nasdaq Drops After Six Sessions Winning Streak
US stock markets came under pressure over the last couple of days amid renewed conflict with China and warnings over the reopening of the economy. The selloff is supported by Senator Lindsey Graham legislation that requires China to collaborate with an investigation related to coronavirus or face sanctions.
The warnings from Dr Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said that a vaccine will be necessary to end the virus spread, but also warned that it will be a while before a usable one is available.
“Markets have been torn between optimism on the tentative re-opening of some economies and caution on the still grim economic data,”
Mike Pyle, global chief investment strategist at BlackRock Investment Institute, said in a note.
“Markets will watch out for any cracks in the financial system and elsewhere in the economy as virus infections climb,”
Mike Pyle added.
The Dow Jones Industrial Average dropped 0.48% in Tuesday trading while the S&P 500 dipped 0.6% and the Nasdaq Composite index ended in the red for the first time in the last seven trading sessions.
Oil price continues the upside momentum amid prospects of improving demand as governments all over the world have started easing restrictions. Brent oil price trades around $30 a barrel while US oil surged to $26 a barrel after trading in negative territory at the beginning of this month.
Federal Reserve officials also came up with the warnings that a partial shutdown of the U.S. economy amid virus outbreak would substantially decline the economic growth rate for the second quarter, increasing the risk of potential bankruptcies that could create a lasting scar.
All three indices have recovered more than half of losses from March lows.