(Reuters) – A stock market that shook off the coronavirus pandemic, economic devastation and sky-high equity valuations was reminded of all three on Thursday, as Wall Street took its biggest dive in three months.

The S&P 500 slumped 5.9% in its steepest one-session loss since March 16, following renewed fears of a coronavirus resurgence as U.S. states gradually reopen their economies after a nearly countrywide shutdown. Investors also reacted to dour economic forecasts from the U.S. Federal Reserve.

U.S. stocks and COVID-19 cases here

Equities have surged since late March, with the Nasdaq reaching record highs and the S&P 500 climbing over 40% from March lows as the number of coronavirus cases nationwide declined modestly.

The pace of growth in new cases has recently picked up again, although the increase may be partly due to more testing. The one-week moving average of daily new cases stands at 30,553. This measure fell to 27,753 on June 1, from a high of 44,000 on April 14.

Investors also bought stocks on expectations that, following trillions of dollars of economic stimulus, the government and Federal Reserve would step in again to protect the economy if necessary.

The rally has pushed over 90% of S&P 500 stocks to levels above their 50-day average prices.

Nearly all S&P 500 companies above 50-day average here

Even as stocks soared, some signs have illustrated many investors’ doubts about the rally. Investors have moved increasing amounts of money into money market assets in recent months.

Dash for cash here

Prices for gold and Treasuries, both popular destinations during uncertain times, have also increased.

Many companies have declined to give earnings forecasts in recent months due to uncertainty about the coronavirus, leading investors to put less emphasis on valuations based on earnings expectations. Still, following Wall Street’s recent climb, the S&P 500 is trading at 22 times expected earnings, its most expensive level since the dot-com boom.

S&P 500’s PE revisits dot-com highs here

Increased savings, stimulus checks from the government, and ultra-low interest rates have led to a flood of money into the markets from first-time traders, leading to chaotic trades via mobile phone apps.

However, most retail investors have remained very cautious in recent months, according to TD Ameritrade’s Investor Movement Index. That index shows the behavior of TD Ameritrade’s overall customer base recently becoming slightly less pessimistic after their sentiment fell to eight-year lows in recent months.

S&P 500 & investor sentiment here