At closing bell, the Dow Jones Industrial Average fell 1,861.82 points, or 6.89%, to 25,128.17. The S&P 500 index tanked 188.04 points, or 5.89%, to 3,002.10. The tech-heavy Nasdaq Composite Index lost 527.62 points, or 5.26%, to 9,492.73.
A broad and vicious risk-off mood took hold of Wall Street on Thursday on rekindled concerns about the pace and quality of the recovery from the progressively successful reopenings from coronavirus lockdowns after the central bank's dour outlook and the prospect of a possible resurgence of COVID-19 infections.
At the conclusion of its two-day monetary policy meeting on Wednesday, the U.S. Federal Reserve released its first pandemic-era economic outlook, after which Chair Jerome Powell warned of a "long road" to recovery.
The U.S. Federal Reserve on Wednesday opted to leave its interest rates unchanged and gave a gloomy outlook for the economy, forecasting the world's largest economy could shrink by as much as 6.5% this year before expanding by 5% in 2021. Fed Chairman Jerome Powell remarked that the central bank is "not even thinking about raising rates" and that interest rates are likely to remain near zero until the end of 2022. The central bank also said it will at least maintain the current rate of bond purchases.
Also, the Organization for Economic Cooperation and Development expects that the coronavirus pandemic triggers the worst global recession in nearly a century, with global economic output to slump by 6% this year and take a bigger hit if there's a second wave of COVID-19 infections.
A much-feared second wave of COVID-19 infections is becoming likelier in some states as reopening efforts continue. Texas reported its third straight day of record coronavirus hospitalizations, while Florida notched its worst weekly increase in cases. Arizona and California also revealed spikes in new cases. The surging case counts pushed the number of U.S. coronavirus infections above 2 million mark and over 112,000 Americans have died, according to Johns Hopkins University.
ECONOMIC NEWS: US Weekly Jobless Claims Rise Slower In Early June- US initial jobless claims tumbled to 1.542 million in the week ended June 6th, a decrease of 355,000 from the previous week's revised level of 1.897 million, with businesses reopening following the coronavirus lockdown, the Labor Department released a report on Thursday. Jobless claims declined for the tenth straight week after reaching a record high of 6.867 million in the week ended March 28th. Nonetheless, the number of new claims for unemployment benefits since the coronavirus lockdown now exceeds 44 million.
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US Producer Prices Rebound On Higher Food, Energy Prices In May- Producer price index for final demand in US climbed by 0.4% in May after tumbling by 1.3% in April, a report released by the Labor Department on Thursday showed. The bigger than expected increase in producer prices was partly due to a spike in food prices, which surged up by 6.0% in May after falling by 0.5% in April. Energy prices also showed a substantial rebound, jumping by 4.5% in May after plummeting by 19.0% in the previous month. Excluding food and energy prices, core producer prices edged down by 0.1% in May after falling by 0.3% in April. The modest decrease in core prices came as prices for services edged down by 0.2% for the second consecutive month.
COMMODITY NEWS: Crude oil prices tanked on Thursday amid the wider risk-off attitude. West Texas Intermediate crude sank as much as 11%, to $35.41 per barrel. Brent crude, the international benchmark, slumped 9.4%, to $37.82, at intraday lows.
Among Indian ADR, HDFC Bank fell 6.65% to $40.73, ICICI Bank dropped 7.47% to $8.67, Vedanta dropped 8.84% to $5.05, WNS Holdings declined 3.77% to $51.50, Tata Motors shed 9.15% to $6.55, INFOSYS slipped 4.73% to $8.86, Wipro sank 4.88% to $3.12, and Dr Reddys Labs shed 3.51% to $52.52.
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