At closing bell, the Dow Jones Industrial Average index fell by 730.05 points, as the S&P 500 slid by 74.71 points. Similarly, the tech-heavy Nasdaq Composite closed trading with a 259.78-point loss.
Some of the hardest-hit companies Friday included United Airlines and Norwegian Cruise Line, which fell by more than 4%, as well as banking and financial institutions Goldman Sachs Group and Wells Fargo, both which saw their stock values fall by over 6%.
Financial companies endured some of the bigger hits after the Federal Reserve placed new restrictions on the industry Thursday, ordering banks to suspend share buybacks and cap dividend payments at current levels for the third quarter.
The move came as a result of the US central bank’s annual stress test, which found in a worst-case scenario that banks could rack up as much as $700 billion in loan losses if unemployment hits a whopping 19.5%.
However, the driving force behind investor worries and the Federal Reserve’s response is, of course, the novel coronavirus, cases of which have in recent weeks skyrocketed in several US states - a development that has forced officials to reverse course on easing lockdown measures meant to stop the spread of the illness.
With Florida reporting nearly 9,000 new COVID-19 cases - its largest single-day jump - on Friday, state officials suspended the consumption of alcohol at bars statewide, effective immediately.
And in Texas, residents haven’t fared any better, as the Lone Star State reached a record 4,739 hospitalizations on Thursday, which marked a new high for the 14th consecutive day. In an effort to curb the new COVID-19 surge, Texas Gov. Greg Abbott announced Friday that bars would be shuttered and restaurants limited to 50% of their capacity.
Rhys Herbert, a senior economist at retail banking company Lloyds Banking Group, told the Wall Street Journal that “the market is sort of on hold,” and that investors “are really looking for guidance on what’s the next stage: Will we see signs of recovery or is there a danger things slip again?”
At present, the US has recorded over 2.4 million COVID-19 cases, according to data from Johns Hopkins University. The US novel coronavirus death toll has topped 124,000.