Dow Jones plunges 1,800 points in worst day since March

The stock market started the week continuing to rally following a better-than-expected May jobs report. But a few days later, it was a different story.

The Dow Jones Industrial Average sank more than 1,800 points on Thursday, as reports of increasing case counts of COVID-19 spooked investors who were previously optimistic about states beginning to reopen, CNBC reports. The S&P 500 and Nasdaq Composite also fell, with all three suffering their worst day since March 16.

This came after earlier this week, the S&P 500 rose to the point that it erased all of its losses for 2020 as the Dow also continued to rise. The previous week, stocks soared after the release of May's jobs report that showed the unemployment rate unexpectedly declined to 13.3 percent when it was expected to rise to almost 20 percent.

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But the U.S. on Wednesday topped 2 million confirmed cases of COVID-19, and 12 states have seen a rise in hospitalizations. The Federal Reserve on Wednesday also projected that the unemployment rate will remain above six percent through the end of next year. Federal Reserve chair Jerome Powell said the Fed is "not even thinking about thinking about raising rates" and that a full economic recovery is "unlikely to occur until people are confident that it is safe to re-engage in a broad range of activities."

“Fears of a second wave are beginning to cause anxiety in the stock market," Deutsche Bank Securities chief economist Torsten Slok told The Washington Post. "Powell did what he could to be dovish but there is nothing the Fed can do about the risk of a second wave of the virus."