U.S. stocks declined on Wednesday as investors became worried the recent rise in coronavirus infections could slow down global economic recovery. Dow Jones Industrial Average fell 3% or 823 points, S&P 500 down 2.9%, while NASDAQ Composite traded 3% lower. In Europe, the German Dax Index fell 4.4%, the lowest level since late May, French CAC 40 dropped 4%, while London FTSE 100 traded 3.2% lower.
- Experts expect stringent lockdown restrictions as coronavirus cases rise, which has created market fears amidst U.S. elections, which has elevated volatility.
- Expectations are high that with about ten vaccine candidates in late-stage trials, restrictions will start to be lifted in Q2 2021, helping corporate earnings recover to pre-pandemic levels by the end of 2021
- Given the uncertainty of the stocks, Cboe Volatility Index (VIX) or Wall Street’s “fear gauge” jumped 40, the highest since June 15 as investors turned to bonds for safety.
