Stocks declined Tuesday on the final trading day of the second quarter as Federal Reserve Chairman Jerome Powell warned that a rebound in the U.S. economy could stall if the spread of the coronavirus isn’t contained.
The Dow Jones Industrial Average was down 74 points, or 0.29%, to 25,520, the S&P 500 fell 0.11% and the Nasdaq declined 0.08%. Stocks posted solid gains Monday, with the S&P 500 rising 1.47%, after a better-than-expected housing report offset news that coronavirus cases surpassed 10 million people globally.
”We have entered an important new phase and have done so sooner than expected,” Powell said in prepared remarks ahead of testimony Tuesday before the House Financial Services Committee. “While this bounceback in economic activity is welcome, it also presents new challenges – notably, the need to keep the virus in check.”
Powell will be joined Tuesday before Congress by U.S. Treasury Secretary Steven Mnuchin.
Lawmakers have pumped more than $3 trillion into the world’s biggest economy, leading to a pick-up in job gains and an increase in consumer spending.
But Powell noted in his remarks that more than 20 million American have lost their jobs since the pandemic took hold in mid-March.
“The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus,” he said. “A full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities.”
Katerina Simonetti, senior portfolio manager at UBS Private Wealth Management in Philadelphia, said Wall Street should be ready for that uncertainty.
“The recent increase in the numbers of reported Covid-19 cases has resulted in considerable market uncertainty,” Simonetti said. “Further market decline cannot be ruled out.”
The U.S. has 2,590,582 cases of the coronavirus, the most in the world, according to Johns Hopkins University. Deaths in the U.S. have risen to 126,141, also the most in the world.
Confirmed cases of the coronavirus have rise to more than 10.3 million, according to Johns Hopkins.
The World Health Organization warned the “the worst is yet to come,” six months after it started tracking the virus.
Boeing (BA) – Get Report traded lower on Tuesday after receiving word from Norwegian Air Shuttle that it will not be moving forward with buying nearly 100 remaining Boeing-built planes, and that it was suing Boeing over losses from the grounding of the 737 MAX.