U.S. stocks slid Thursday after the European Central Bank unveiled plans to deploy additional stimulus, raising fresh worries about the health of the global economy.
The Dow Jones Industrial Average fell 263 points, or 1%, to 25409, heading for its fourth straight day of losses. The S&P 500 declined 1% and the Nasdaq Composite shed 1.1%.
Global stocks’ rebound has stalled this week as investors have grappled with lingering questions about U.S.-China trade relations, as well as the slowdown in the world economy.
The ECB said Thursday that it would leave interest rates unchanged at least through the end of the year, months longer than investors had previously expected. It also added that it would launch a fresh batch of ultracheap long-term bank loans, a measure meant to try to encourage growth and spending at a time when the global economy has shown signs of faltering.
While the ECB’s moves showed it was willing to take aggressive steps to try to stimulate growth, it also illustrated the extent to which officials have become concerned about the eurozone’s slowdown. Worries about the global economic outlook have damped many investors’ optimism this year, even as stocks around the world have bounced higher.
“The big question is whether these policy adjustments are enough to avert a synchronized global downturn,” said Jon Hill, managing director and rates strategist at BMO Capital Markets. “If the accommodation isn’t sufficient, then we’re maybe seeing the start of the endgame.”
European stocks lost ground following the ECB’s announcement, with the Stoxx Europe 600 down 0.8% after trading higher earlier in the session. In another sign of pessimism, the euro lost 0.7% against the U.S. dollar and yields on Italian and German government debt declined.