Wall Street stocks tumble as worries about Delta variant, global growth rise

Amid worries about the Delta variant of coronavirus, the US stock markets ended in the red on Thursday. The rising number of COVID-19 cases of the Delta variant have added to global growth concerns.

On Thursday, the broad-based S&P was down 0.9% to 4,320.82, while the tech-rich Nasdaq Composite Index shed 0.7% to 14,559.79. The Dow Jones Industrial Average fell 0.8% to 34,421.93.

The declines came a day after S&P and Nasdaq hit record highs on Wednesday. Thursday’s slide was also heralded by the yield on the 10-year US Treasury note falling below 1.3%.

Amid concerns about lower interest rates, most banking shares fell on Thursday. Wells Fargo, Goldman Sachs and Bank of America all lost more than 2%.

Railroad shares fell sharply following a Wall Street Journal report that the Biden administration plans an executive order to address consolidation in the industry.

Norfolk Southern fell 7.2%, Union Pacific dropped 4.3% and CSX shed 6.2%.

Japan’s decision to ban fans at the upcoming Olympics Games was an indication of COVID-19 being a growing threat to Asia, analysts said.

“There’s a growing concern about global growth,” said Chris Low of FHN Financial, who also cited a shift towards monetary easing by top Chinese officials as illustrative of concerns about the economic outlook.

Before the Wall Street stocks opened on Thursday, markets across Europe and Asia witness an ugly day after Japan’s Olympic announcement. Most major bourses in Europe fell by over 1.5% after the European Central Bank (ECB) revised its inflation target. The ECB issues a statement saying that there could be a ‘transition period’ where the inflation would be slightly higher than the target.

Japan is not the only one taking drastic measures to curb the spread of new variants of coronavirus. Tunisia’s health ministry spokesperson described the effect of COVID-19 on the country as catastrophic. As cases rise in Spain and Portugal, France has warned its citizens from travelling to the two countries on vacation.