Major benchmark indices plummeted after the opening bell in New York as investors remain concerned over the widespread impact of the coronavirus pandemic, as well as ongoing tensions with China and a decline in big tech stocks.
The Dow Jones Industrial Average fell nearly 3%, or about 825 points, at 10:30 a.m. ET. It marked the fourth consecutive week that the blue-chip benchmark made a retreat. The S&P 500 tanked 2.5%, or almost 84 points, while the Nasdaq Composite dropped 2.3%, or 245 points.
Economists have pointed out factors including the shares for a number of major tech firms, which are currently in the red after helping push the market higher in recent months. (Facebook Inc., Apple Inc. and Microsoft Corp. were all down at least 2% in morning trading.) What’s more, the United States’ relationship with China is also in the spotlight as President Donald Trump approved a deal that would allow Walmart and Oracle to take a minority stake in a new U.S.-headquartered company called TikTok Global.
Wall Street has also continued to worry about an additional stimulus package, which has yet to receive consensus from Congressional leaders. The federal government’s CARES Act, which provided financial relief to individuals and businesses impacted by the pandemic, expired for the most part at the end of July, and Democrat and Republican lawmakers have so far been unable to agree on another plan.
Last week, all 17 members of the U.S. central bank’s Federal Open Market Committee announced that they expected to keep interest rates at zero to 0.25% at least through the next year, while 13 of them suggested that those rates would stay there through 2023.
The Federal Reserve indicated that it would not hike rates until inflation has grown to 2% and is on track to “moderately exceed 2% for some time.” It will also consider whether the country’s labor market has “reached levels consistent with the committee’s assessments of maximum employment.”