Markets fall as Powell describes downturn as “without modern precedent”

Markets fell on Wednesday.

The S&P 500 fell 1.8 percent, the STOXX Europe 600 fell 1.9 percent and the Nikkei 225 fell 0.5 percent.

Federal Reserve Chairman Jerome Powell said on Wednesday that the “scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II”.

This leaves stocks vulnerable to another significant pullback, especially with the market, especially in the US, already seen as expensive.

“The market is pretty high and the Fed has put a lot of money in here,” David Tepper, founder of Appaloosa Management, told CNBC on Wednesday. Before Wednesday’s sell-off, it was “maybe the second-most overvalued stock market I’ve ever seen,” he said.

On Tuesday, hedge fund manager Stanley Druckenmiller told the Economic Club of New York: “The risk-reward for equity is maybe as bad as I’ve seen it in my career.”