Global markets slumped Thursday, with the Dow plunging more than 500 points in morning trading as investors worried over emerging threats to the economic recovery, from a pandemic resurgence to labor market pressures.

On Thursday, Japan declared a state of emergency for Tokyo and said it would no longer allow spectators at the Olympics as it tries to beat back a surge in coronavirus cases. Meanwhile, the more virulent delta variant has taken root in more than 100 countries, according to the World Health Organization, including those with high vaccination rates.

Asian markets closed mostly in the red, with Hong Kong’s Hang Seng Index shedding nearly 2.9%. European markets were down across the board at midday, with France’s CAC 40 dropping 2.3%, the pan-European Stoxx 600 off nearly 2% and the German Dax down 2.1%.

Shortly before 10:30, the Dow Jones industrial average was down 1.4%, trading around 34,173. A day after notching record highs, the S&P 500 and tech-heavy Nasdaq were off 1.5% and 1.6%, respectively.

Companies whose fates are heavily tethered to the recovery also saw their shares sink: Carnival stock fell more than 2.1%, and United Airlines fell 1.3%. Big banks, like JPMorgan Chase, and chip makers Nvidia and Qualcomm also flashed red.

Jitters extended to cryptocurrency markets, where bitcoin tumbled more than 6%, to roughly $32,500.

“The mood in the markets is starting to sour,” Sophie Griffiths, market analyst with OANDA, wrote in commentary Thursday. “Concerns over the health of the economic recovery are denting risk sentiment and hitting demand for stocks even as the Federal Reserve moves towards tapering asset purchases.”

An unexpected increase in weekly jobless claims stirred more concerns about the recovery. An estimated 373,000 Americans filed initial unemployment claims last week, the Labor Department reported Thursday, up about 2,000 from the previous week. Economists had projected a modest decline.

Though Thursday’s figures are significantly lower than they were this time last year, they remain a long way off from the 256,000 recorded pre-pandemic.

The labor market remains a chief concern: Job openings are at a record high according to the Labor Department, which reported more than 9.2 million open positions at the end of May as employers struggle to find workers amid a rush in summer business activity.

“Fresh job losses are not the major issue that they were earlier in the pandemic,” Mark Hamrick, senior economic analyst at Bankrate.com, said in commentary earlier this week. “Of more concern at present is the still heightened level of unemployment, the dampened level of labor force participation and continuing challenges for employers who want to add workers.”

The 10-year U.S. Treasury sank to its lowest level since February on Thursday as investors sought shelter from volatility, before ticking slightly higher to 1.29%. Bond yields move inversely to prices.

“The sharp drop in yields reflects the market’s concern that the Fed will begin tapering soon and that the removal of liquidity from the system will create volatility and a rush out of risk assets (like equities) and toward safe havens (like government bonds),” Chris Zacarelli, chief investment officer for Independent Advisor Alliance, wrote in commentary Thursday.

Gold, another investor safe-haven, rose nearly 0.8% to about $1,817 an ounce.

Fears the pandemic will hamper global travel pushed oil markets lower, with brent crude, the international oil benchmark, falling 0.1% to $73.34 a barrel. West Texas intermediate crude, the U.S. benchmark, declined 0.32% to $71.97.


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