Updated at 11:02 a.m. ET
Stocks plunged Thursday after Federal Reserve Chairman Jerome Powell warned that the economic recovery is likely to take a long time and amid reports that new coronavirus cases are rising in several states.
In late morning trading, the Dow Jones Industrial Average was down more than 1,000 points, or 3.9%, and the S&P 500 lost 3.3%. Airline and hospitality companies, which have been especially hard hit by the COVID-19 lockdowns, were among those losing ground.
Prices also fell sharply in European and Asian markets.
Before this week, stocks had been on a steady rise, with major indexes regaining much of the ground they lost in the early, dark days of the lockdowns. The Nasdaq Composite Index hit a record high this week.
While Fed officials voted to keep interest rates low on Wednesday, they also issued a gloomy statement about the prospects for a full recovery.
"The ongoing public health crisis will weigh heavily on economic activity, employment and inflation in the near term and poses considerable risks to the economic outlook over the medium term," the Fed said in a policy statement after a two-day meeting.
In a news conference later, Powell said the Fed is committed to ensuring that the recovery will be "as robust as possible" by continuing to buy bonds but also warned, "It is a long road. It is going to take some time."
Also hurting stocks is evidence of the continued threat posed by the pandemic, with Florida, Texas and other states reporting an increase in cases.