Thursday has been the worst trading day for American shares since they began to recover from the coronavirus pandemic. The drop of Dow Jones (by 7%) and S&P 500 (by 6%) has been caused by worse predictions on American economy, which was released by the Fed. Moreover, the plunge was supported by daily increase of new coronavirus cases.
According to the Fed, the U.S. economy could slump in 6.5%. The unemployment rate could reach 9.3% in the end of the year. The unemployment rate is currently around 14%, while recent weeks has showed that the trend could change sooner or later.
Yet, analysts say that the Thursday shares sale does not necessarily mean a change in growing trend. When the Fed publishes any report, it usually affects shares. It could be probable that investors took an advantage of the break and collected profits. Then, shares may grow again.