Oil futures also slumped. US oil fell 2% during Asian trading hours Friday, extending Thursday’s 8% drop. West Texas Intermediate was last trading at $35.61 per barrel. Brent, the global benchmark, dropped 1.1% to $38.10 per barrel, extending Thursday’s 7.6% decline.
The losses came after US stocks plummeted on Thursday, recording their worst day since March 16.
The pandemic already has caused unemployment to soar in the United States as parts of the economy shut down. A second wave of infections could force many businesses to close again after just having reopened.
“The fear of a rising rate of Covid-19 infections is the most important driver in our view for this sell-off,” wrote Tai Hui, chief Asia market strategist for JP Morgan Asset Management, in a research note published on Friday.
The oil markets, meanwhile, are responding to fears about the uptick in infections in the world’s largest oil consuming economy, according to Stephen Innes, chief global markets strategist at AxiCorp.
He added that the recent negative sentiment has been “aggravated” by comments from Federal Reserve Chairman Jerome Powell, who on Wednesday warned that the country’s economic future was highly uncertain.
— Anneken Tappe and Tami Luhby contributed to this report.