Stock market crashes amid COVID fears: What you need to know

Picture Courtesy: Yale University

The global stock market took one of the biggest hits of the year on Monday amid fears of increasing COVID-19 cases across the globe. The increasing cases are due to the quickly spreading Delta variant of the coronavirus.

London’s FTSE 100 plunged 2.6%. Dow Jones, in New York, fell about 725 points, a drop of 2.1%. The S&P 500 was down 1.6 % and NASDAQ 1.1%.

This was the biggest drop since October last year when Dow dropped 943 points. An investment director at AJ Bell said to BBC, "The big concern for the market is whether we are going to see a slowdown in the global economic recovery”.

This drop comes after the US reported strong retail growth for the month of June, however, according to a July report, the average American consumers are growing less confident about the economy.

The stagnation in vaccination rates is a big concern for governments worldwide since it is directly related to easing restrictions. President Joe Biden again held a press conference urging Americans to get vaccinated. 96 % of the new COVID cases in America are among the people who are not vaccinated.

Despite of this drop, the stock market is still up more than 10% if compared with last year. Officials within the US administration have said that there is no plan to go back to complete the shutdown.