Wall Street feared that the spread of the Delta variant could undo much of the progress gained over the past year.
“Growing concerns around the Delta variant are adding to anxieties about the global growth outlook,” said Keith Lerner, chief market strategist at Truist Advisory Services.
China also pledged more economic stimulus Thursday in a surprise move that concerned some investors about the fragility of the economic rebound.
Bond market wonkiness: Investors continued to pour money into the safety of US government bonds, sending yields to a five-month low.
At 1.25%, the 10-year Treasury yield hasn’t been this low since February. That’s down significantly from its 52-week high of 1.77% set in March, as inflation fears were running rampant. Inflation concerns have eased since then, but the sharp decline in bond yields is also a signal of fear in the market that could portend slower economic growth, Hogan said.
Perhaps confirming some of those fears, ISM reported weaker-than-expected US manufacturing activity earlier this week. And the job market offered a bit of bad news Thursday morning, as unemployment claims rose a bit last week from the previous week.
Summer sleepiness: Stocks have been boring throughout much of 2021, rising steadily — but not sharply — seemingly every session this year.
With volume low as investors hit the beaches, don’t discount some news making an outsized impact on the market, Hogan noted.
— CNN Business’ Matt Egan and Anneken Tappe contributed to this report