The Dow is expected to fall 650 points, or 2%, on Thursday as future US contracts fall. S&P contracts fell 1.8% and Nasdaq contracts fell 1.3%. US crude fell 4%.
The growing number of coronavirus cases in the United States has devalued Wall Street. A second wave of infections could force many businesses to close again immediately after opening.
Federal Bank President Jerome Powell said on Wednesday that the economic future was extremely uncertain. While acknowledging that the May job fair was a welcome surprise, he noted that many millions of Americans would never return to work and could remain unemployed for years.
Coronavirus could permanently change many parts of the economy, and Fed economists predict that unemployment will remain high for several years. While Powell and the Fed are also expected to keep the lead in the stimulus pedal for some time – usually a major boost to corporate bottom lines and stocks – the dour forecast shocked investors.
Coronavirus virus activation
As states across the country reopen their economies, people are forced to live with the virus. A corona model that was carefully monitored by the Institute for Health Measurement and Evaluation at the University of Washington was updated on Wednesday and now predicts nearly 170,000 coronavirus deaths in the United States by October 1.
“If the US is not able to control growth in September, we could face worsening trends in October, November and in the coming months if the pandemic, as we expect, follows the seasonality of pneumonia,” said IHME Dr. . Christopher Murray statement.
The number of global outbreaks 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 highest number of cases after the United States. More than 415,000 people around the world have died.
However, the increased number of coronavirus cases in the United States combined with tremendous financial forecasts by experts, including the US Federal Reserve, suggest continued pain for companies and employees. The ominous prospect may now be more difficult to ignore.
Stephen Innes, chief strategic officer for global markets at AxiCorp, said Thursday that markets are having trouble digesting headlines that suggest new cases of the virus in the United States. “A second blast is nothing to sneeze at,” he said.
Federal Reserve said Wednesday that interest rates are unlikely to rise this year or next. Even in 2022, the majority of central bank policy makers believe that interest rates will remain at current interest rates.
“We’re not thinking about raising interest rates – we’re not even thinking about raising interest rates,” Fed chairman Jerome Powell told reporters during a news conference.
The Fed does not expect economic difficulties to subside any time soon: It has updated its forecast for the year, forecasting a 6.5% drop in the gross domestic product of the US, the broadest measure of the economy, in 2020.
The central bank acknowledged the “enormous human and economic difficulty” caused by the pandemic. By December, the Fed expects the unemployment rate to fall to 9.3% from 13.3% in May, but it is still significantly higher than the 3.5% rate since February. Millions of people will not return to their old jobs, “and there may not be a job for them for a while,” Powell said.
– Faith Karimi, Arman Azad, Joe Sutton and Anneken Tappe contributed to the report.