New York Stock Market Plummets Amid Banking Stocks Collapse and COVID Concerns (Comprehensive)

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market bowed under the Federal Reserve's (Fed) restrictions on bank dividends and share buybacks, as well as the spread of COVID-19.

On the 26th (local time), the Dow Jones Industrial Average fell 730.05 points (2.84%) from the previous day to 25,015.55, the S&P 500 index dropped 74.71 points (2.42%) to 3009.5, and the Nasdaq index declined 259.78 points (2.59%) to 9757.22.

The New York stock market started weak that day, and the decline deepened after some U.S. states, including Texas, announced the reinstatement of economic activity restrictions. CNBC reported that the index drop intensified after Texas partially reversed its economic reopening measures. Texas ordered all bars statewide to operate only for delivery and takeout. According to data compiled by Johns Hopkins University, the number of new COVID-19 infections nationwide reached 40,000, marking the highest since the outbreak began.

Consumer spending for May, announced that day, increased by 8.2%, reversing the previous month's -12.6% decline, but it failed to quell concerns over further infection spread.

U.S. bank stocks, which had led the index rise by rebounding on expectations of easing the 'Volcker Rule' that limits banks' equity investments, were hit by the Fed's restrictions on dividends and share buybacks and closed sharply lower. JP Morgan Chase fell 5.4%, Goldman Sachs 8.5%, highlighting the weakness in bank stocks.

Microsoft, which announced the complete shutdown of all its offline stores in the U.S., fell 2%.

West Texas Intermediate (WTI) crude oil for August delivery closed at $38.49 per barrel, down 0.6% (23 cents) from the previous day. August gold closed at $1,780.30 per ounce, up 0.6% ($9.70) from the previous day.

This content was produced with the assistance of AI translation services.