Dow Plunges 500 Points As U.S. Hits Record Number Of New Coronavirus Cases

The Dow Jones Industrial Average was down 2.1%, over 500 points, on Friday, while the S&P 500 fell 1.9% and the tech-heavy Nasdaq Composite lost 2.1%.

Bank stocks fell after the Federal Reserve placed new restrictions on the banking industry for the first time since the aftermath of the 2008 financial crisis, requiring them to suspend share buybacks and cap dividend payments in the third quarter of 2020.

The Fed’s annual stress test found that “several” big banks could get uncomfortably near minimum capital levels if the coronavirus recession worsens.

Stocks also continued to take a hit from rising fears over a resurgence of coronavirus, with the United States posting a daily record of nearly 40,000 new cases on Thursday, surpassing the previous peak in April, according to data from Johns Hopkins University. 

New infections are spiking in more than 31 states: Some are seeing record numbers of new infections each day—in the thousands, like Texas and Florida, which have been forced to pause their reopening plans.

The market’s losses came despite a record rise in consumer spending last month: The Commerce Department on Friday reported that spending increased 8.2% in May, its largest one-month gain ever.