U.S. stocks ended sharply lower on Tuesday, erasing the previous day’s gains, as investors monitored tentative efforts to reopen the economy and weighed tensions between Washington and Beijing.
What are major indexes doing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.05% fell 457.21 points, or 1.89%, to close at 23764.78, marking its biggest one-day percentage drop since May 1.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.40% lost 60.20 points, or 2.05%, to end at 2870.12, while the Nasdaq Composite index /zigman2/quotes/210598365/realtime COMP +2.13% shed 189.79 points, or 2.06%, to finish at 9002.55, snapping its six-day win streak.
What’s driving the market?
New clusters of COVID-19 cases have emerged in countries that have begun to lift restrictions on business activity imposed to contain the spread of the disease, a development analysts said may be giving investors pause as U.S. states begin loosening lockdowns in a bid to reopen the economy.
In Wuhan, the Chinese city where the coronavirus first emerged late last year, six people tested positive over the weekend, ending a stretch of more than a month that had seen the Hubei province report zero infections, The Wall Street Journal reported .
Dr. Anthony Fauci, the U.S. government’s leading infectious diseases doctor, warned that the country faces “needless suffering and death” if the nation reopens too early during the coronavirus pandemic, as top health officials emphasized in Senate testimony on Tuesday the need to move with caution and expand testing.
“Markets are being driven day-to-day by news of easing economic restrictions and what that looks like,” said Mark Saylor, portfolio manager at Penn Mutual Asset management in an interview. “You’ve had some positive data out of the New York region, but you’re seeing spikes and incidents in areas that maybe are opening too early.”
Worries about geopolitical tensions resulting from the pandemic may have contributed to the stock-market decline in the afternoon, after Bloomberg News reported Republican senators were moving towards a vote to sanction Chinese officials over Beijing’s mistreatment of Uighur minorities in Xinjiang, China. This comes on the heels of reports that the Trump administration was ordering the Federal Retirement Thrift Board to halt its investments in Chinese stocks.
“We expect China to be back in the headlines for many reasons, not the least of which is its politically advantageous for Trump to take a hard line against China,” Katie Nixon, chief investment officer of Northern Trust Wealth Management, told MarketWatch.
The lockdowns of business and travel to combat the coronavirus pandemic may lead to a major U.S. airline “most likely” going bankrupt, Boeing Co. /zigman2/quotes/208579720/composite BA -2.60% Chief Executive David Calhoun said during an interview aired on NBC’s “Today” show Tuesday. Calhoun didn’t identify any carrier, and Bloomberg News quoted a Boeing spokesman as saying the CEO wasn’t referring to any airline in particular. Calhoun said airlines won’t be back to even 25% business by the autumn, and “maybe by the end of the year we approach 50 [percent].”
To provide support for business during the coronavirus crisis, the Federal Reserve Bank of New York began buying corporate-bond, exchange-traded funds Tuesday, marking a historic expansion of the central bank’s efforts to support the economy and financial system during the most significant financial crisis in nearly a century sparked by the COVID-19 pandemic.