The market's optimism that the worst of COVID-19 is behind us seems to be vanishing quickly. The Dow on Thursday plunged 900 points at the open, and things have only gotten worse. The index was down more than 1,500 points, or 5.5%, shortly before 1pm Eastern. The benchmark S&P 500 and the Nasdaq were down 4.6% and 3.8%, respectively. CNBC reports that worries about a "second wave" of infections are a big driver. The US just passed 2 million confirmed cases, and states such as Texas, Florida, and California are registering increases, notes the Wall Street Journal. Also souring the mood is the Fed's assessment Wednesday that the US labor market may not recover for "some years." Stocks in Europe and Asia also fell Thursday.
In regard to second-wave concerns, "if we see those numbers coming back in the biggest economy in the world, then that’s going to lead to a massive correction," Altaf Kassam of State Street Global Advisors in Europe tells the Journal. An official with the Johns Hopkins Center for Health Security tells Bloomberg that the second wave is indeed real, though it's not clear if it's connected to state re-openings or the George Floyd protests. "There is a new wave coming in parts of the country," says Eric Toner. "It's small and it's distant so far, but it's coming." (Read more stock market stories.)