Dow fell 600 points as fear of a coronavirus surge increased in the U.S. and China

A face mask is seen in front of the New York Stock Exchange (NYSE) on May 26, 2020 at Wall Street in New York City. - Global stock markets climbed Monday, buoyed by the prospect of further easing of coronavirus lockdowns despite sharp increases in case rates in some countries such as Brazil. Over the weekend, US President Donald Trump imposed travel limits on Brazil, now the second worst affected country after the United States, reminding markets that while the coronavirus outlook is better, the crisis is far from over. (Photo by Johannes EISELE / AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)

Dow (Indi) futures fell more than 650 points of opening bell or 2.5%. S&P 500 (SPX) futures fell 2% and Nasdaq (COMP) futures fell 1.5%.
Markets in Asia also saw serious decreases after Beijing’s record a new cluster of virus It originates from the city’s largest wholesale food market. The Chinese capital has recorded 79 new cases since a locally infected infection was reported for the first time in about two months last week.

China also reported on economic data, saying the recovery in the second largest economy in the world is slow.

Japan Nikkei (N225) Fell 3.5%. South Korea Kospi (KOSPI) It fell 4.8%. Hong Kong Hang Seng Index (HSI) Fell 2.1% and China Shanghai Composite (SHCOMP) Dropped 1%.
European markets fell broadly in the open. FTSE 100 (UKX) It dropped 2.4% in London. Germany DAX (DAX) 2.5%, while France CAC 40 (CAC40) It fell 2.6%.
Wall Street seemed to be increasingly disconnected from the rest of the world for weeks – large inventory gains seemed inconsistent with relatively high unemployment numbers and other data showing that the economy was struggling. However, the markets started to catch the truth, and despite a slight recovery on Friday, the US indices started to experience heavy decreases that will begin this week.
When most of the United States begins to reopen after coronavirus crashes, scientists and healthcare professionals warn about the potential for a second wave of the virus, which can have devastating effects for the economy. Several US states reopened a few weeks ago, reporting an increasing number of infections and hospitalizations.
A second wave could undermine excessive optimism about the economy, which raises US stocks to record levels.

Meanwhile, in China, the symptoms of another wave of the virus can combine an already stagnant economic recovery.

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Industrial production, investment activity and retail sales improved slightly from previous months, according to data released by the China National Statistics Bureau on Monday. However, all three readings fell below the estimates of analysts surveyed by Refinitiv.

“Ultimately, consumers are willing to leave their apartments amidst the constant social distance required by governments or consumer behavior – [that] “In a recovery note, AxiCorp’s global markets strategist, Stephen Innes,” will determine the pace of recovery. “

Still, some economists pointed to positive signs. According to the China National Services Industrial Production Index, activity in the country’s service sector expanded for the first time this year. The index measures the change in the production of the services sector every month.

Capital Economy Chinese economist Martin Rasmussen, in a research report, “The overall economic output rose above the 2019 levels in May for the first time since the Covid-19 outbreak.” “We previously thought that the Chinese economy will not return to positive growth on an annual basis. [the third quarter]. However, today’s data show that this milestone can be reached this quarter. “

Oil also moved down. US oil futures dropped 4.1% to $ 34.76 a barrel. Global oil benchmark Brent fell 3.4% to $ 37.49 a barrel. Both Brent and US oil prices fell more than 8% last week due to concerns about pandemic revival.

Matt Egan and Anneken Tappe contributed to this report.

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