Wall Street recorded historic losses on Thursday as fears intensified over the economic fallout from the coronavirus pandemic amid what some saw as an anemic response from the White House.
The Dow Jones Industrial Average fell by 10 percent, with the Nasdaq and S&P 500 both down 9 percent. It was the worst point drop ever for the Dow, and its worst performance since the market crash in 1987.
Banks, travel, and energy sectors both notched up double-digit losses, after President Donald Trump issued a ban on foreign entry into the U.S. for some travelers.
Trading was halted twice, triggering thresholds that paused market activity on the floor of the New York Stock Exchange in premarket trading and immediately after the opening bell.
“It’s going to all bounce back and it’s going to bounce back very big,” Trump said Thursday, during a meeting with Ireland’s Prime Minister Leo Varadkar.
It was yet another brutal day for markets, as businesses and governments shored up their response to the pandemic and companies from Google to JPMorgan asked employees to work from home where possible.
Investors had been anticipating robust economic relief as part of President Donald Trump’s address to the nation on Wednesday night, in line with his pledge earlier this week to take “major steps” and implement a “very substantial” tax cut as part of the administration’s response to the pandemic.
However, markets were underwhelmed by the economic stimulus package, which offers emergency loans to small businesses, deferred tax payments for some people, but made no specific mention of paid sick leave or free testing for the coronavirus, which continues its spread across the U.S.
In his address from the Oval Office Wednesday, Trump announced he would be “suspending all travel from Europe to the U.S. for the next 30 days” in an effort to limit the spread of the coronavirus. That created immediate panic as Americans abroad rushed to buy last-minute tickets home, and also fueled trader concern that suspended travel and trade between the U.S. and the European Union would come at a steep economic cost.
The White House later clarified that Trump’s comments did not refer to U.S. residents or permanent citizens and only “suspends the entry of most foreign nationals who have been in certain European countries at any point during the 14 days prior to their scheduled arrival to the United States.”
Travel stocks continued their double digit plunge, with airlines and hotels hardest hit. American Airlines also announced it would be placing price limits on U.S.-bound flights from Europe.
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Trading was also suspended earlier this week, when the S&P 500 hit the 7 percent “circuit breaker” threshold on Monday morning. That sell-off came after an oil production spat between Russia and Saudi Arabia pushed the price of oil down by 30 percent overnight, the biggest drop since the Gulf War, in 1991.