New York (AFP)

The New York Stock Exchange fell sharply Wednesday after an intervention by the head of the Federal Reserve, who warned that the damage caused by the new coronavirus could have a lasting impact on the American economy.

Its flagship index, the Dow Jones Industrial Average, lost 2.17% to 23,247.97 points.

The Nasdaq, with a strong technological coloring, lost 1.55% to 8,863.17 points.

The broader S&P 500 Index, which represents the 500 largest companies on Wall Street, fell 1.75% to 2,820.00 points.

Jerome Powell, the boss of the American Central Bank, warned Wednesday in a speech that the damage of the pandemic on the first world economy could be "lasting", which justifies according to him plans of emergency aid "expensive" but essential to avoid a deep recession.

Powell said additional aid may be needed to respond to the economic shock.

According to JJ Kinahan of TD Ameritrade, the chairman of the Fed "did his best, but the market deemed his intervention to be the signal that the stock market had been too optimistic about the recovery of the" American economy.

After hitting lows in mid-March, the New York indices have indeed started a spectacular recovery until early May, even as the indicators have shown one after the other the ravages caused by the coronavirus on l economic activity of the United States.

"What the market is trying to find out is how the United States is reopening its economy, how quickly and if they are doing it with care," said Quincy Krosby of Prudential.

"The possibility of new sources of contamination, or even a second wave that would force the country to confine itself again, encourages caution", adds the expert, who specifies that the situation in Asia and in Europe, where deconfinement started earlier, was closely observed.

In addition, market players remained attentive on Wednesday to renewed tensions between the United States and China, which could worsen the slowdown in the world economy.

The US administration has repeatedly claimed to have evidence that the new coronavirus came from a laboratory in the city of Wuhan, the cradle of the pandemic.

Beijing vigorously denied the accusations, calling them false and senseless.

On the bond market, the 10-year rate on the American debt fell, to 0.6509% against 0.6651% the day before at the close.

© 2020 AFP