By Akane Otani and Caitlin Ostroff
Growing fears of a second wave of coronavirus infections sent the stock market tumbling Thursday, pulling the Dow Jones Industrial Average down more than 1,400 points and putting it on course for the worst day since March.
For months, investors have been betting the U.S. and other countries will be able to reopen their economies without seeing a surge in coronavirus cases that might force them to backtrack. Stocks have risen accordingly, with the S&P 500 turning positive for the year as recently as Monday.
But in the past few days, investors have gotten more signs that the smooth reopening they have been hoping for may be increasingly difficult to achieve -- throwing into doubt their hopes for a nascent economic recovery.
U.S. coronavirus cases have topped 2 million, with the death toll climbing past 111,000, according to data compiled by Johns Hopkins University. States from Florida to California to Arizona to Texas are seeing spikes in coronavirus cases after having lifted restrictions put in place to limit the virus' spread.
Adding to investors' worries, top officials increasingly believe the economy's recovery from the pandemic-fueled recession will be slow and uneven.
Federal Reserve Chairman Jerome Powell warned Wednesday that the labor market could take years to recover from the pandemic, and that millions of Americans might be unable to return to their old jobs or industries.
His message underscored to investors that "we're in this for the long haul," said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. "We're not going to recover quickly, and there will be pain ahead."
The Dow shed 1,443 points, or 5.4%, to 25546. The S&P 500 lost 4.4% and the Nasdaq Composite declined 3.8%.
Thursday's selloff was broad, sending all 11 sectors of the S&P 500 lower.
Banks took a big hit, with Bank of America down 7.8% and Goldman Sachs off 6.7%. A darkening economic outlook and low interest rates for the foreseeable future threaten to crimp lending profitability of banks.
Shares of manufacturers also tumbled, with heavy machinery maker Caterpillar off 7.2% and aerospace giant Boeing down 11%. Both stocks are seen as barometers of global industrial activity.
Only a few stocks managed to escape the carnage. Among the exceptions: Zoom Video Communications, whose online video chatting platform has grown in popularity as the pandemic has forced schools and workplaces to operate remotely. Shares of the company rose 1.7%.
Meanwhile, worries about the growing number of coronavirus cases sent stocks elsewhere around the world lower, too.
The pan-continental Stoxx Europe 600 dropped 4.1% Thursday, hit particularly hard by losses among shares of banks, oil-and-gas companies and auto makers.
Yields on European government bonds fell as eurozone finance ministers met to discuss a proposed rescue package to fund the region's recovery. Investors' expectations for the size and scope of the aid package have dimmed as some EU members have pushed back against an ambitious plan recently floated by the European Commission.
Markets aren't pricing in the likely disagreement that the proposal will face from some member nations, said James Athey, senior investment manager at Aberdeen Standard Investments.
Gold, which traders tend to scoop up when they anticipate further stock declines, climbed 0.9%.
In the Asia-Pacific region, Hong Kong's Hang Seng Index fell 2.3%. Japan's Nikkei Stock Average lost 2.8%, logging its biggest one-day decline since the start of May, and Australia's S&P/ASX 200 fell 3.1%.
Some investors warned that even if the U.S. doesn't impose as broad a lockdown as it initially did after the coronavirus pandemic hit, regional measures to curtail the spread of the virus will weigh on the economy's recovery.
"There are some areas that are looking concerning, and that is one of the things that is going to get the market's attention," said Hani Redha, a multiasset portfolio manager at PineBridge Investments.
Xie Yu contributed to this article
Write to Akane Otani at email@example.com and Caitlin Ostroff at firstname.lastname@example.org