Dow falls more than 500 points after Powell warns of gloomy economic outlook

U.S. stock markets fell Wednesday following remarks from Federal Reserve Chairman Jerome Powell offering a gloomy outlook for the economy after the coronavirus pandemic.

The Dow Jones Industrial Average was down 517 points, or 2.2 percent, while the S&P 500 dropped 50 points, or 1.8 percent.

Earlier in the day, Powell backed significantly more spending if it counters further economic damage caused by the pandemic.

“There is a growing sense that the recovery may come more slowly than we would like, but it will come. And that may mean that it’s necessary for us to do more,” he said.

He also noted that poorer Americans were seeing the brunt of the hardship. Among those earning $40,000 a year or less, 40 percent had last their jobs in March, he said.

Other economic indicators continued to flash warnings as well.

In their largest drop since 2009, producer prices fell by 1.3 percent in April, following a 0.8 percent drop in consumer prices. Some analysts worry the drop in prices could hint at the possibility of sustained deflation.