Concerns about the upturn in COVID-19 infections finally hit Wall Street on Tuesday with share prices slumping in the last hour.
The Dow fell 396.85 points, or 1.51%, to 25,890.18, the S&P dropped 34.4 points, or 1.08%, to 3,145.32 and the Nasdaq 89.76 points, or 0.86%, to 10,343.89 after touching a new intraday peak in the session.
The stock sell-off intensified in the afternoon after a number of senior Federal Reserve officials expressed concern about the pandemic’s economic impact.
More parts of the United States reported tens of thousands of new infections. New York expanded its travel quarantine for visitors from three more states, while Florida’s greater Miami area rolled back its re-opening.
News that Brazil’s hard rightwing President Jair Bolsonaro had confirmed he had tested positive for the virus, didn’t help investor confidence seeing his country has the second-highest number of infections and deaths (more than 65,000).
Sharemarkets in London, Paris and Frankfurt fell about 1%. Asian markets also weakened but China’s markets rose with Shanghai up 0.37% – much lower though than the 5.7% surge on Monday.
The dollar edged higher as risk currencies such as the Australian dollar fell (to around 69.50 US cents after peaking just under 70 US cents) and gold settled at a near 8-year peak around $US1,808 an ounce for the second week in a row.
Cleveland Federal Reserve Bank President Loretta Mester said during an interview with CNBC that a resurgence in coronavirus cases across the country is making consumers more cautious, and more fiscal stimulus is needed to help the economy recover fully from the crisis.
Ms Mester was the latest in a growing line of senior Fed officials to express worry about the strength of the recovery in the US economy and the impact from the growing toll of infections.
There’s now a belief that the Fed is getting very worried about the US recovering petering out as it is overwhelmed by the COVID-19 infections in the south, west and southwest (Florida, Texas, California, Arizona).
The overnight trading in the SPI futures saw a 36 point fall just before 7 am Sydney time, meaning the ASX 200 will start the day weak.
That was after a late slide on Tuesday saw the index close down 17 points – with a 1% slump in the final hour after the Melbourne lockdown decision from the Victorian government.
Comex gold futures finished at their highest settlement since September 16, 2011, as the metal climbed back above the $US1,800-an-ounce level for the second time in a week as investors refocused on the rising number of coronavirus infections in the US and globally and the impact of that on economic activity.
August gold rose $US16.40, or 0.9%, to settle at $US1,809.90 an ounce, ending the session at the highest intraday level.
Comex September silver added 12 cents, or 0.6%, to reach $US18.699 an ounce after a 1.4% gain on Monday and Comex September copper rose 0.8% to $US2.797 a pound.
Iron ore prices rallied with 62% Fe fines climbing 1.8% or $US1.77 to $US103.01 a tonne.
Oil though eased with West Texas Intermediate crude for August down one cent to settle at $US40.62 a barrel in New York.
In Europe, Brent oil for September eased by 2 cents, or 0.05%, to $US43.08 a barrel.