Stocks opened lower on Monday morning as investors braced for the possibility of a second wave of coronavirus cases even as economies around the world take their first cautious steps toward reopening.
- The Dow Jones Industrial Average fell 1.0%, 250 points, on Monday; the S&P 500 was also down 1.0% and the Nasdaq fell 0.7%.
- Officials in South Korea issued a warning over the weekend that the country should brace for a second wave of the virus after it saw the biggest one-day increase in new infections after a month of improvement.
- China also reported a new case of coronavirus in Wuhan on Sunday, the region’s first in more than a month.
- Over the weekend, U.K. Prime Minister Boris Johnson unveiled a plan to ease lockdown restrictions for some professions without ending the lockdown completely, raising questions about worker safety and what many see as contradictions within his messaging.
- As economies around the world slowly reopen, experts have issued warnings about the risk of new infections and the possibility of second and third waves of the virus.
- On Friday, Moody’s Analytics chief economist Mark Zandi said that another spike in infections could have disastrous implications for the economy: “If we get a second wave, it will be a depression,” he told CNBC.
Stocks rallied last week despite one of the worst monthly jobs reports in history. Some 20.5 million jobs were eliminated in April—that’s nearly every job created over the past decade, gone in a single month because of the coronavirus. As a result, the unemployment rate shot up to 14.7%. Just two months ago, the unemployment rate was sitting at a 50-year low of 3.5%, after the United States had been adding jobs every month for nearly a decade.
But despite the discouraging labor market data, the market has moved higher in recent weeks as it looks beyond the short term pain caused by the virus, especially as several states—including Georgia, Florida, Texas and California—have begun to reopen businesses and lift lockdowns.