US open: Stocks tumble amid fears around second wave of coronavirus infections
Wall Street stocks opened sharply lower on Thursday amid an increased number of new Covid-19 cases in states emerging from lockdowns.
As of 1530 BST, the Dow Jones Industrial Average was down 3.14% at 26,143.41, while the S&P 500 was 2.63% weaker at 3,106.39 and the Nasdaq Composite come out the gate 1.96% softer at 9,824.13.
The Dow opened 846.58 points lower on Thursday, continuing on from losses recorded in the previous session after the Federal Open Market Committee said it expects the US economy to shrink by 6.5% this year. However, the Fed said it anticipates that the US economy will return to growth in 2021, with unemployment falling to 9.3% and GDP increasing 5%.
"The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term," it said on Wednesday.
Treasury Secretary Steven Mnuchin also said on Wednesday that he would seriously consider more direct payments to US citizens in the next phase of the White House's Covid-19 rescue package, stating that funds should also be targeted to help sectors struggling to reopen - including hospitality and tourism.
But despite support from the White House and the Fed, concerns regarding a second wave of Covid-19 cases were weighing heavily on sentiment on Thursday after Texas, one of the first states to exit lockdowns, reported a third straight day of record-breaking coronavirus hospitalisations.
Nine of California's 58 counties have also reported a spike in new confirmed cases and the overall number of cases in the US has now topped two million.
Donald Trump stated he would resume hosting of election rallies from 19 June and was said to not be planning to enforce social distancing measures at such events.
Also in focus on Thursday, the number of Americans filing for unemployment claims continued to fall back last week. According to the Department of Labor, initial jobless claims fell by 355,000 during the week ending on 6 June to reach a pace of 1.542m (consensus: 1.45m).
Still on the macro front, producer prices increased more than expected in May due to rising meat costs, but the underlying trend in producer inflation continued to be subdued.
The Labor Department's producer price index for final demand rebounded 0.4% last month after plunging 1.3% in April - the biggest decrease since the series was revamped in December 2009.
On the corporate side of things, shares in United Airlines, Delta, American, Southwest, Carnival and Norwegian Cruise Line were all down at least 6% at the open as a result of the increased number of new Covid-19 hospitalisations causing concerns about future travel.
Grubhub shares shot up 7.89% after agreeing to be acquired by Dutch firm Just Eat, while Oneok shares slumped 12.36% after launching a public offering of 26m shares.
Oil prices were also under pressure after the bell, with West Texas Intermediate down 7.90% at $36.47 per barrel and Brent Crude 6.61% weaker at $38.97 a barrel.