Wall Street rebounds from its steepest plunge since March.

Stocks on Wall Street rose Friday, rebounding from their steepest drop in months, in a day of unsteady trading.

The S&P 500 closed more than 1 percent higher, after earlier having climbed more than 3 percent. On Thursday, the index plunged by about 6 percent, its sharpest drop since mid-March.

Financial markets are suffering from a shift in sentiment this week, as investors have seemed to acknowledge the risks to the economy from pandemic-related shutdowns earlier this year and the prospect of a second-wave of coronavirus infections as government’s lift restrictions on activity, The New York Times’s Matt Phillips reports.

Confidence in a quick recovery and return to normal was rattled after the Federal Reserve chair, Jerome H. Powell, warned that the depth of the downturn and pace of the recovery remained “extraordinarily uncertain.”

The central bank repeated that warning on Friday. In a semiannual monetary policy report to Congress, its first since the pandemic took hold, the Fed said the nation’s gross domestic product would probably contract “at a rapid pace” in the second quarter after “tumbling” in the first.

“Chairman Powell threw a bucket of cold water on the thought that the economy is going to go back to where it was in 2019 any time soon,” said Matt Maley, chief market strategist at Miller Tabak, an asset management firm.

Analysts like Mr. Maley have also noted that the market was overdue a pullback, after a staggering rally — a gain of as much as 45 percent for the S&P 500 from March lows — had left stock prices somewhat disconnected from reality.

It was the fastest recovery off a market low for the benchmark index since 1933, and came even as tens of millions of Americans applied for unemployment benefits and the national unemployment rate surged to its highest level since the Great Depression.

Also worrying investors is data from some states that have eased quarantine restrictions, such as Texas and Arizona that shows a resurgence of the virus in those states.

“The idea that Covid is fully behind us, or that a V-shaped recovery is in front of us, were put on hold” said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Conn.

Even if the rise in cases doesn’t lead to another large-scale lockdown, analysts say it does dash hopes for a return to a more normal environment over the summer and makes a full rebound in particularly exposed industries less likely.

A judge allows Hertz to sell new stock during bankruptcy proceedings.

A bankruptcy court judge on Friday allowed Hertz to sell up to $1 billion in new stock, granting the car rental agency’s request as investors improbably bought up shares in recent days.

“The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity,” lawyers for the company argued in a bankruptcy court hearing on Thursday.

The judge, Mary F. Walrath of the United States Bankruptcy Court for the District of Delaware, agreed, saying in her ruling that the stock sale “is in the best interests” of Hertz and its creditors.

The company’s stock price ended the day Friday at $2.83 per share, up from a low of 40 cents after it filed for bankruptcy last month. The stock briefly climbed above $5.50 on Monday, its highest level since mid-April.

Hertz did not immediately respond on Friday to a request for comment on when and whether it would proceed with such a sale.

The move is exceedingly rare for a bankrupt company, the DealBook newsletter notes, because most bankruptcy restructurings result in stockholders — who are last in line to recover financial assets — being wiped out. There are also precedents for investors coming out ahead. The hedge fund mogul William A. Ackman made a fortune from owning stock in the bankrupt real estate business General Growth Properties nearly a decade ago.

But in a sign of Hertz’s dire financial straits, the company has asked for permission to end leases for more than 144,000 vehicles that it says it can no longer afford.

Pushing fashion, Amazon opened a photo studio as a ‘warehouse’ exemption.

A large Amazon fashion photo studio in Brooklyn, where models pose in clothing sold on the company’s site, sat shuttered for more than two months as the coronavirus spread in New York.

Then, on May 18, Amazon reopened the studio and later began taking photos with models. It told employees on conference calls that the studio, in the Williamsburg neighborhood, could open under state rules that allowed warehouses and fulfillment operations to operate as essential businesses.

There was just one problem: It appears that Amazon was playing fast and loose with the rules.

A few days after The Times asked the state about the open studio, Amazon closed it. A manager told employees that someone in state government had given the company a heads-up that it may need to comply with an unspecified new policy. The studio remains closed.

Reopening the studio shows how Amazon has pressed ahead during the pandemic, looking to right its operations quickly after the virus initially caught it on its heels. The push to take advantage of its warehousing operations, when physical retailers were closed, was particularly evident in areas where it has long struggled, like high-end fashion.

Wealth advisers are divided over taking aid meant for small businesses.

The federal government’s multibillion-dollar aid program to help small businesses hurt by the pandemic prompted outrage after billions went to public companies while mom-and-pop businesses were sidelined.

Now, another group of recipients is being scrutinized for taking the money: independent wealth management firms, some of which manage billions of dollars on behalf of affluent Americans. Their fees, which are typically 1 percent, can bring in tens of million annually regardless of market fluctuations.

The initial $349 billion allocated in April for the Paycheck Protection Program went quickly, prompting Congress to approve an additional $310 billion. But some business owners found the guidelines for accepting the money confusing or too restrictive.

Now, a divide is growing between advisory firms that took the money and those that declined because of ethical concerns. The issue is more than a tempest in a teapot. Some firms could lose millions in fees if their clients start pulling their wealth out.

“We didn’t think it was very credible that these firms actually needed the money,” said Gary Ribe, the chief investment officer of Accretive Wealth Partners, which manages $130 million and did not apply a loan from the Paycheck Protection Program. “Getting it out of an abundance of caution — that didn’t seem credible, either.”

The Fed describes a grim and risky pandemic-era economy.

The Federal Reserve painted a sober picture of the economy in its semiannual monetary policy report to Congress, highlighting risks to the financial system and emphasizing that pandemic-induced job losses were hitting lower-income workers and minorities especially hard.

“Real gross domestic product will contract at a rapid pace in the second quarter after tumbling at an annual rate of 5 percent in the first quarter of 2020,” the Fed said in its report, released Friday. It noted that the most “severe” job losses had been sustained by workers with lower incomes, and said that borrowing conditions remained tight for households and businesses with weaker credit histories.

The Fed also suggested that the pandemic was probably costing workers more than their jobs: Those who were still in the labor market were seeing weak pay growth.

“In the months ahead, labor market prospects for the unemployed and underemployed — both overall and for particularly hard-hit groups of workers — will largely depend on the course of the Covid-19 outbreak itself and on actions taken to halt its spread,” according to the report to Congress.

Jerome H. Powell, the Fed chair, will testify before the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday.

Britain’s economic output fell by one-fifth in April, a record amount.

The British economy shrank by 20.3 percent in April compared with the month before, a record contraction that indicated devastation in many parts of the economy.

The data reflects the first full month of Britain’s lockdown to reduce the spread of the coronavirus, and is likely to increase pressure to relax those rules more quickly.

Manufacturing fell by 24.3 percent, led by a 90 percent fall in the sector that includes motor vehicles, according to the Office of National Statistics.

In March, British economic output contracted by 5.8 percent.

The drop in the G.D.P. in April was the biggest Britain had ever seen and nearly 10 times worse than the steepest pre-coronavirus fall, said Jonathan Athow, the government’s deputy national statistician.

“Virtually all areas of the economy were hit, with pubs, education, health and car sales all giving the biggest contributions to this historic fall,” he said in a news release.

Earlier this week, the Organization for Economic Cooperation and Development projected that the British economy would contract by 12.5 percent in 2020, worsening to 14 percent if there were a second wave of infections.

In Europe, ‘corona cycleways’ are becoming the new post-confinement commute.

As France eased its coronavirus lockdowns last month, a small army of street workers fanned out across Paris in the dark of night. They dropped traffic barriers along car lanes and painted yellow bicycle symbols onto the asphalt. By morning, miles of pop-up “corona cycleways” had been laid, teeming with people heading back to work.

As European cities emerge from quarantines, bicycles are playing a central role in getting the work force moving again. Governments are trying to revive their economies from a deep recession, but cannot fully rely on public transportation to get workers to their jobs because of the need for social distancing. In urban areas at least, bicycles are suddenly an unlikely component to restarting economic growth.

In Europe, where many cities have integrated cycling as a mode of transportation, the pandemic is speeding up an ecological transition to limit car traffic and cut pollution, especially as new research draws links between dirty air and coronavirus death rates.

Britain, France, Italy and their neighbors are accelerating hundreds of millions of euros in investments on new biking infrastructure and schemes to get people pedaling.

“This crisis has made clear that we need to change the way we live, work and move,” said Morten Kabell, chief executive of the European Cyclists’ Federation. “In the era of social distancing, people are wary of using public transportation, and cities can’t take more cars. So they are looking to the bike as a natural mode of mobility for the future.”

Airlines sue to stop Britain’s quarantine on arriving passengers.

Three of the largest airlines operating from Britain have filed a legal challenge to the 14-day quarantine imposed by the British government on Monday on many travelers arriving in the country. According to a statement, British Airways, easyJet and Ryanair want a “judicial review” of the measures, which are intended to reduce importation of the coronavirus into Britain, as soon as possible.

The airlines said that the quarantine, which carries heavy fines for those who break the rules, would “have a devastating effect on British tourism and the wider economy and destroy thousands of jobs.” The airlines also said that the government had provided no scientific evidence that such a severe policy was warranted.

As in many countries, Britain’s lockdown has severely curtailed air travel, putting huge financial pressure on airlines, some of which have estimated that air travel won’t return to previous levels for two to three years. The quarantine has been imposed as the government is beginning to ease other parts of the lockdown, including rules on which shops can open.

The government has argued that as the virus comes under control, a quarantine will help stem imported cases.

Airline executives have become increasingly vocal in their criticism of the British government. Ryanair’s chief, Michael O’Leary, rejected the government’s recommendations that passengers check as much baggage as possible to help prevent transmission of the virus.

In an interview with the news outlet The Independent, Mr. O’Leary termed the advice “more rubbish,” and said it was much safer for passengers to keep their bags rather than turn them over to baggage handlers.

Catch up: Here’s what else is happening.

• Lululemon, the premium athleisure brand, said on Thursday that its sales in the first quarter fell 17 percent to $652 million, showing that not even makers of comfortable, stretchy clothing have been spared during the pandemic. The company said that as of June 10, 295 of its 489 stores had reopened, and that e-commerce sales made up more than half of its first quarter revenue, compared with 27 percent in the same period last year. Still, unlike most other retailers, it managed to post a profit of $28.6 million.

• Boeing has asked a major supplier of parts for its troubled 737 Max jet to stop work on four Max fuselages and not to start work on 16 more, which were planned for delivery this year, according to the supplier, Spirit AeroSystems. Based on that request and further correspondence with Boeing, Spirit said it expected to cut back work it had planned on 125 of the jets and would furlough some employees on the project for three weeks starting Monday.

Reporting was contributed by Karen Weise, Vanessa Friedman, Paul Sulivan, Gregory Schmidt, Stanley Reed, Mohammed Hadi, Michael J. de la Merced, Alan Rappeport, Kevin Granville, Sapna Maheshwari, Liz Alderman, Kate Conger, Paul Mozur, Carlos Tejada, Michael Ives and Niraj Chokshi.