Oil prices lent credence to forecasts for the biggest economic slump since the 1930s

Bank of America fell 2.7% in premarket trading as it joined JPMorgan Chase & Co and Wells Fargo & Co in reporting a plunge in quarterly profit and setting aside billions for potential loan losses tied to the coronavirus pandemic.

Goldman Sachs Group Inc also set aside nearly $1 billion to meet future loan defaults, while Citigroup Inc’s loan loss reserve grew to nearly $5 billion. Their shares dropped 1.8% and 2.9%, respectively.

With the outbreak crushing business activity, analysts expect earnings for S&P 500 firms to slide 12.3% in the first quarter, while the International Monetary Fund has predicted the global economy would shrink 3% in 2020, its sharpest downturn since the Great Depression.

“Stocks have enjoyed a decent rebound over the last month so perhaps we’re seeing a little risk now being taken off the table as the economic reality of the situation starts to hit home,” said Craig Erlam, senior market analyst, OANDA.

The benchmark S&P 500 .SPX has climbed about 30% from its March trough, lifted by a raft of U.S. monetary and fiscal stimulus and on early signs that coronavirus cases were peaking in some hotspots, but the index is still down about 16% from its record high.

The index jumped 3% on Tuesday on hopes the Trump administration could move to ease lockdowns. However, hotspot New York later sharply raised its official virus death toll to more than 10,000.

J.C. Penney Co Inc (JCP.N) slumped 15% as sources said the retailer was exploring filing for bankruptcy protection after the virus outbreak upended its turnaround plans.

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