Stock prices took another nosedive Wednesday, amidst fears that a spike in coronavirus cases in parts of the Sunbelt could force the economy into another lockdown.
The major stock indexes finished the day down more than 2%, as investors grappled with evidence that the economy may not rebound as fast as they’d expected.
The Dow Jones Industrial Average lost 770 points, a drop of more than 2.7%.
Shares of companies that have been especially hard hit by the pandemic, such as home-builders and cruise lines, lost ground, as did bank stocks.
The slide in prices followed reports that California and Florida are seeing a record number of cases, while intensive-care units in Houston hospital are nearly at capacity.
The International Monetary Fund said it expects the U.S. economy to shrink by 8% this year and then rebound 4.5% in 2021. The IMF said the global economy will fall by a record 4.9% this year.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the IMF said.
“The adverse impact on low-income households is particularly acute, imperiling the significant progress made in reducing extreme poverty in the world since the 1990s,” the report added.