The US stock markets extended the downtrend in Wednesday trading amid concerns over economic growth and increasing conflict between the United States and China. The concerns over lofty valuations following the sharp rally in the past forty-five days kept investors on the sidelines instead of finding a buying opportunity.

Fed Chairman Jerome Powell said the government has provided a massive stimulus package last month but we need to do more to support the economy. Powel comments came after the Central Bank reported that almost 40% of households that have below $40K in income have lost a job due to coronavirus outspread.

“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks,” Jerome Powell said. Labor Department last week reported that 20m American have lost their jobs in April.

All three US stock market indices ended the Wednesday trading in the red with the Dow Jones Industrial Average plunged closed 2.1% lower while the S&P 500 and the Nasdaq Composite also dropped nearly 2%.

“Everything is dependent on the next several months and how successful businesses can re-open,” Nick Raich, CEO of The Earnings Scout, wrote in a note. “All the stimulus in the world will not offset businesses closing their doors for an extended time.”

On the other hand, investor’s sentiments are negatively impacted by David Tepper’s stance as the billionaire hedge fund investor says stock markets are substantially overvalued and valuations are at the highest level since 1999.

However, he claims that only a few big tech stocks like Alphabet, Amazon, and Facebook are fairly valued. He further said that US stock markets have already hit a bottom in March but it doesn’t mean that market will not fall again from the current levels.