(Reuters) – U.S. stocks slumped on Thursday with the Dow shedding over 5% and the index on track for its sharpest one-day decline since March 18, as investors fretted over a resurgence in coronavirus infections and a grim economic outlook from the Federal Reserve.

The S&P 500 and the Dow Jones were set to wipe off most of their gains made this month, and the tech-heavy Nasdaq tumbled 3.9% as it came off four consecutive sessions of record highs.

New coronavirus cases rose slightly in the United States after five weeks of declines, only a part of which is due to higher testing, a Reuters analysis showed.

Wall Street’s fear gauge, the CBOE volatility index, jumped 8.4 points to 36.08, on track for its biggest daily point gain since March 16.

The easing of lockdowns and a massive stimulus program to help the economy bounce back quickly to pre-pandemic levels have been pivotal in helping the three main indexes recover about 40% from a deep, virus-induced selloff.

“There’s a possibility that new COVID-19 cases may reappear which could set the economy back at least for a period of time,” said Michael Sheldon, chief investment officer of RDM Financial Group in Westport, Connecticut.

“Today’s decline is a setback for the market and it could certainly be more choppy over the near term.”

The S&P 500 and the Dow ended lower on Wednesday after Fed Chair Jerome Powell acknowledged it could take years for the millions of people laid off due to COVID-19 to get back to work, even as he reiterated his promise to support the virus-hit economy.

A Labor Department report on Thursday showed about 1.54 million people applied for state unemployment benefits for the week ended June 6, roughly in line with estimates.

“We’re actually going to have a W-shaped recovery,” said Chad Oviatt, director of investment management for Huntington Private Bank in Columbus, Ohio. “Markets are dealing with the fact that we now have an elongated recovery period.”

All major S&P sectors were deep in the red with financial, energy and material sectors, that track economic growth, posting the biggest declines.

Boeing Co shed 11.9% after its top supplier Spirit AeroSystems Holdings Inc announced a 21-day layoff for staff doing production and support work for Boeing’s 737 program. Spirit AeroSystems tumbled 15.1%.

At 12:57 p.m. ET, the Dow Jones Industrial Average was down 1,489.12 points, or 5.52%, at 25,500.87, the S&P 500 was down 147.21 points, or 4.61%, at 3,042.93. The Nasdaq Composite was down 394.51 points, or 3.94%, at 9,625.83.

Shares of banks, which tend to benefit in a higher rate environment, slipped 7.8%, extending losses after Fed policymakers saw key overnight interest rates remaining near zero through at least 2022.

Declining issues outnumbered advancers 17.12-to-1 on the NYSE and 13.80-to-1 on the Nasdaq.

Underscoring Wall Street’s momentum in recent months, no stock on the S&P 500 hit a new low on Thursday, even as the stock markets tanked. The Nasdaq recorded 18 new highs and seven new lows.