Asian shares declined Thursday and U.S. futures turned higher after the S&P 500 slid 3.5% overnight for its biggest drop since June.

The selling in U.S. markets followed broad declines in Europe, where the French president announced tough measures to slow the virus’ spread and German officials agreed to impose a four-week partial lockdown.

So far, the measures are not as stringent as shutdown orders that swept the world early this year, but the worry is they could still hit the already weakened global economy.

In Asia, some countries appear to be keeping the pandemic in check, while caseloads surge in others. India is on track to surpass 8 million confirmed COVID-19 cases, Indonesia and the Philippines are struggling to keep outbreaks in check, and fresh clusters of cases are being reported in Japan.

“When it rains, it pours, particularly if you are following today’s COVID-19 headlines," Edward Moya of Oanda said in a commentary. “An overvalued stock market was ripe for a pullback, but when you focus on COVID-19 headlines, it looks more like panic-selling."

The Bank of Japan kept its ultra-loose monetary policy unchanged in a policy meeting that ended Thursday. But it downgraded its outlook for the economy, saying that while conditions will eventually improve, “risks to both economic activity and prices are skewed to the downside, mainly due to COVID-19."

Retail sales in Japan, the world's third largest economy, fell 8.7% from a year earlier in September, according to data reported Thursday. While purchases of goods has recovered somewhat, services remain weak.

The Japanese central bank has been pumping tens of billions of dollars into the economy every year, trying to restore stable growth as the country's population shrinks and ages. Japan was already in recession when the pandemic began.

In Thursday trading, Hong Kong's Hang Seng lost 1% to 24,452.65 while the Nikkei 225 in Japan fell 0.5% to 23,294.51. In South Korea, the Kospi lost 1.7% to 2,305.70, while the Shanghai Composite index recovered from early losses, gaining 0.1% to 3,271.72. Australia's S&P/ASX 200 declined 1.7% to 5,952.40.

Shares also fell in Taiwan and Southeast Asia.

The future for the S&P 500 rebounded, gaining 0.9% to 3,293.80 while the future contract for the Dow industrials added 1% to 26,668.00.

In the U.S., cases are increasing in just about every state and the number of deaths and hospitalizations due to COVID-19 are on the rise. Even if the most restrictive lockdowns don’t return, investors worry people will limit their spending and activities, hurting businesses. The U.S. economy could lose momentum just as prospects for more economic support from Washington have dwindled as Tuesday's Election Day nears.

“Many people had come to believe we were at least stable, and now we’re having a second uptick, which throws potential GDP and everything else up in the air,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. ”I did not expect this level of volatility or this degree of a sell-off.”

Uncertainty about the upcoming presidential election has also been pushing markets around.

The S&P 500 lost 119.65 points to 3,271.03. The Dow lost 943.24 points, or 3.4%, to 26,519.95. The Nasdaq composite slumped 3.7% to 11,004.87. The selling was widespread, and 96% of stocks in the S&P 500 fell.

Crude oil slipped further, with U.S. benchmark crude giving up 5 cents to $37.35 per barrel in electronic trading on the New York Mercantile Exchange. It tumbled 5.7% Wednesday on worries that an economy already weakened by the virus would consume even less energy and allow excess supplies to build higher.

Brent crude, the international standard, gave up 13 cents to $39.51 per barrel. It fell 5.4% to $39.64 per barrel on Wednesday.

A measure of fear in the stock market touched its highest level since June, when the market suddenly tumbled amid concerns that a “second wave” of coronavirus infections had arrived. The VIX measures how much volatility investors expect from the S&P 500, and it climbed 20.8% Wednesday.

As usual whenever volatility spikes, investors headed into the safety of U.S. government bonds. The yield on the 10-year Treasury note was at 0.79%, down from as high as 0.87% last week.

Even a parade of better-than-expected reports on corporate profits for the summer has failed to shift the momentum.

Microsoft, the second-biggest company in the S&P 500, reported stronger profit and revenue for its latest quarter than expected but still sank 5%.

UPS fell 8.8% after also reporting better-than-expected earnings, though it said the outlook for its business is too cloudy due to the pandemic to offer any forecasts for its revenue or profits in the current quarter.

Investors' hopes that Congress and the White House could soon offer more big support for the economy as it struggles through the pandemic have largely faded. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have continued their talks, but investors see little chance of a deal happening before Election Day next week.

Economists say the economy likely needs such aid after the expiration of the last round of supplemental unemployment benefits and other stimulus approved by Washington earlier this year.

In currency dealings, the dollar strengthened to 104.46 Japanese yen from 104.34 yen. The euro rose to $1.1752 from $1.1747.

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AP Business writers Alex Veiga, Stan Choe and Damian J. Troise contributed.