Global stocks slide after Fed chief warns of a slow recovery and Trump fans US-China tensions

• Global stocks dropped on Thursday after Federal Reserve Chair Jerome Powell warned the coronavirus outbreak could cause long-lasting damage to the US economy.
• The pan-continental European Stoxx 50 fell 2% and futures tied to the S&P were broadly flat.
• President Trump fanned US-China tensions by tweeting that "dealing with China is a very expensive thing to do" and even "100 Trade Deals" would not make up for the "Plague from China."
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Global stocks dropped on Thursday after Federal Reserve Chair Jerome Powell cautioned the coronavirus pandemic could cause long-term damage to the US economy, warning in a webcast speech on Wednesday that "the path ahead is both highly uncertain and subject to significant downside risks."

Despite several European countries beginning to ease some lockdown restrictions, the continent's stock indexes fell for a second straight day.

The UK's FTSE 100 and the pan-European Stoxx 50 slumped 2.4% and 2% respectively. Their declines came after the Dow Jones Industrial Average dropped more than 500 points on Wednesday.

Powell said earlier this week that additional relief measures would be required to further shore up an already battered economy — "something that may be hard to come by given the fractious state of US politics at the moment," Connor Campbell, a financial analyst at SpreadEx, said in a morning note.

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Powell's comments come at a time when investors are fearful of a second wave of coronavirus cases as lockdowns are slowly relaxed. On the bright side, he dismissed the need for negative interest rates, even though US futures markets have been toying with the idea, and added that the evidence they are effective as a measure "is very mixed."

Meanwhile, President Donald Trump fanned US-China tensions in a tweet on Wednesday. He said that "dealing with China is a very expensive thing to do" and "100 Trade Deals" would not make up for the losses caused by the "Plague from China."

"The situation between the two nations is in danger of spiraling out of control," Campbell said. He added that the continuing fall in global indices was also "an unpleasant breakfast for European trades, one that explains why the region's indices immediately continued yesterday's losses."

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Here's the market roundup as of 11:15 a.m. in London (6:15 a.m. ET):

• European equities fell, with Germany's DAX down 1.8%, Britain's FTSE 100 down 2.4%, and the Euro Stoxx 50 down 2%.
• Asian indexes fell with China's Shanghai Composite down 1.1%, Hong Kong's Hang Seng down 1.2%, and Japan's Nikkei down 1.7%.
• US stocks are set to open slightly lower. Futures underlying the Dow Jones Industrial Average, the S&P 500, and the Nasdaq fell as much as 0.3%.
• Oil prices jumped, with West Texas Intermediate up 5.3% at $26.65, and Brent crude up 4.2% at $30.44.
• The benchmark 10-year Treasury yield fell by about 0.6%.
• Gold rose 0.5% to $1,726.

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