The risk of a second covid-19 outbreak for the economy 1:05

New York / Hong Kong (CNN Business) – Global stocks plummeted on Monday as the United States and China grapple with new coronavirus outbreaks, indicating that the pandemic continues to wreak havoc on the global economy.

Dow futures (INDU) fell more than 800 points, or 3.2%, extending losses before the opening bell. S&P 500 (SPX) futures were down 3%, and Nasdaq (COMP) futures were down 2.3%.

Asian markets also saw sharp declines after Beijing recorded a new set of cases originating from the city’s largest wholesale food market. The Chinese capital has registered 79 new cases since a locally transmitted infection was reported last Friday for the first time in nearly two months.

China also reported troubling economic data, suggesting that the recovery in the world’s second-largest economy is progressing slowly.

Japan’s Nikkei (N225) ended down 3.5%. South Korea’s Kospi (KOSPI) lost 4.8%, closing its worst day since March. Hong Kong’s Hang Seng Index (HSI) fell 2.1%, and China’s Shanghai Composite (SHCOMP) declined 1%.

European markets generally decreased at the opening. The FTSE 100 (UKX) fell 2.4% in London. Germany’s DAX (DAX) fell 2.5%, while France’s CAC 40 (CAC40) decreased 2.6%.

For weeks, Wall Street seemed increasingly disconnected from the rest of the world: Big stock gains seemed inconsistent with relatively high unemployment numbers and other data showing the economy was in trouble. But markets have begun to catch up with reality, and despite a slight recovery on Friday, US indices. They are on the way to steep falls this week.

As much of the United States begins to reopen after confinement with coronavirus, scientists and health experts are warning of the potential for a second wave of the virus, which could have devastating effects on the economy. Various US states They reopened a few weeks ago are now reporting an increasing number of infections and hospitalizations.

A second wave could undermine extreme optimism about the economy that had catapulted US stocks to record levels.

In China, meanwhile, signs of another wave of the virus could exacerbate an already slow economic recovery.

Industrial production, investment activity and retail sales improved somewhat from previous months, according to data released by the China National Bureau of Statistics on Monday. Still, all three readings fell below the expectations of analysts surveyed by Refinitiv.

“Ultimately, it is the consumer’s willingness to leave their apartments in the midst of persistent social distancing, either by government mandate or by consumer behavior, [eso] it will dictate the speed of recovery, ”wrote Stephen Innes, chief global markets strategist at AxiCorp, in a research note. “But China’s consumer-led recovery is not moving fast or stretching the imagination.”

Still, some economists saw positive signs. Activity in the country’s service sector expanded for the first time this year, according to the China National Services Industry Manufacturing Index. The index measures the change in production in the service sector each month.

“Overall economic output returned above 2019 levels in May for the first time since the covid-19 outbreak,” wrote Martin Rasmussen, a China economist at Capital Economics, in a research report. “We had previously thought that China’s economy would not return to positive year-on-year growth until [el tercer trimestre]. But today’s data suggests that this milestone could be reached this quarter. ”

Oil also moved lower. US oil futures fell 4.1%, to trade at $ 34.76 a barrel. Brent, the world benchmark for oil, lost 3.4% to hit $ 37.49 a barrel. Brent and US oil prices They fell more than 8% last week amid concern over the resurgence of the pandemic.

– Matt Egan and Anneken Tappe contributed to this report.