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The potential for the epidemic to spread rapidly Delta variant of coronavirus It swept financial markets on Monday, putting Wall Street on its way to its worst daily drop in months.
The S&P 500 fell as much as 2 percent, at the pace of its sharpest daily drop since mid-May. The Stoxx Europe 600 fell 2.3 percent, its worst drop this year. Major indexes in Hong Kong and Japan also closed the day with sharp declines.
Sales were broad, reflecting a range of concerns about economic growth and the potential for rising Covid-19 infections to lead to a return of restrictions on travel and tourism. Energy stocks led the decline as oil prices fell, but shares of travel companies also fell sharply. Norwegian Cruise Line and American Airlines each fell about 5 percent. Banks, which are also sensitive to the outlook of the economy, also experienced a decline.
The Dow Jones industrial average fell nearly 2.7 percent, its biggest daily loss this year.
Yields on government bonds fell as investors sought a less risky place to park their cash. Bond yields fell as prices rose. Yields on 10-year Treasury bills fell to 1.19 percent, while yields in the UK and Germany were also lower.
“There is a fear that this will be as good as it gets for risky assets,” said Edward Moya, senior market analyst at Oanda, a currency exchange. “We are still in the early stages of the earnings season, where we will see companies continue to voice concerns about pricing pressures.”
Consumers are also worried about rising prices. A consumer survey released Friday by the University of Michigan showed that the inflation rate had become the primary concern for households, leading to a decline in consumer sentiment in early July. On Thursday, Federal Reserve Chairman Jerome H. Powell told the Senate Banking Committee: inflation rose to uncomfortably high levels He said he and his colleagues are watching price increases carefully.
Monday’s drop comes close to record highs with the S&P 500. Even after Monday’s slump, the index has gained close to 13 percent this year as investors are betting on the economic recovery, albeit with brief, turbulent swings amid growth and inflation concerns. The rise of the Delta variant seemed to give investors a new reason to pull back.
The highly contagious variant currently accounts for the majority of new cases in the United States and is currently hovering above average. 31,000 one day. Los Angeles County on Sunday became the first major county to revert to mask requirement for all people indoors in public spaces.
Cases are also increasing rapidly in Europe and Asia. In recent days, Indonesia emerged as the epicenter of the current outbreak after surpassing India and Brazil as the country with the highest number of new infections and Singapore on Monday He said it was facing the highest levels of infections in almost a year.
More than two dozen athletes, coaches, referees and other officials participate in the competition in Japan. Tokyo Olympics virus test was positive. The U.S. Olympic and Paralympic Committee confirmed on Monday that a junior alternate on the U.S. women’s gymnastics team had tested positive for the coronavirus.
Oil prices drop after big sale Oil producers have reached an agreement To increase production on Sunday. Analysts said OPEC and Russia agreed to pump more oil next month, increasing worldwide supply by 2 percent, but supply will remain tight, at least until the decline. US crude benchmark West Texas Intermediate fell 6.7 percent to $66.99 a barrel. Occidental Petroleum Corporation shares fell more than 5 percent, while ConocoPhillips fell more than 4 percent.
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