Wall Street sank in the red on Thursday, experiencing its worst session since its plunge in March, in a market overtaken by uncertainty on the economic and health front in the United States.
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Its flagship index, the Dow Jones Industrial Average, tumbled 6.90% to 25,128.17 points. The highly technological Nasdaq lost 5.27% to 9,492.43 points and the S&P 500 dropped 5.89% to 3,002.10 points. "We started the week with an overvalued market and a correction was in order," commented Karl Haeling, head of market strategy for LBBW.
Since their plunge in March, the major New York indices have in fact continued to progress, the Nasdaq even closing on Wednesday above the symbolic bar of 10,000 points for the first time in its history. But the decision of the Federal Reserve (Fed) on Wednesday to keep its rates unchanged, between 0% and 0.25%, until 2022, with the anticipation of a slow economic recovery, provided investors with a pretext for a decline. fellow.
President Donald Trump has returned to his criticisms of the Fed, which forecasts a drop in American gross domestic product of 6.5% in 2020 before a rebound of 5% next year. “The Federal Reserve is so often wrong. (...) We will have a very good third quarter, an excellent fourth quarter and one of our best years in 2021, ” the White House tenant tweeted on Thursday.
Fear of a second wave
The second reason for Thursday's stock market tumble, according to Karl Haeling, "is that the market has decided to take an interest in the increase in cases of coronavirus contamination outside of the northeastern United States" . While the United States now has more than 113,000 pandemic-related deaths and more than 2 million people infected, Texas and North Carolina have more Covid-19 patients hospitalized than a month ago. Arizona is also showing worrying signs. "It is difficult to say whether this represents a real increase in the number of cases or whether it is due to the fact that more screening tests are carried out," he questions.
The American secretary of the Treasury Steven Mnuchin assured in any case this Thursday morning, on the chain of financial information CNBC, that there would be no new closure of the American economy even in the event of the second wave of the pandemic . On the bond market, the 10-year rate on the American debt fell, settling at 0.6657% around 20.15 GMT against 0.7623% Wednesday evening.