The Dow Jones Industrial Average plummeted by 650.19 points, completely wiping away the index’s monthly gains. The S&P 500 fell by 64.42 points, and the Nasdaq Composite dipped into red territory with a 189.35-point decline.
As has been the case for many months, travel and leisure stocks are experiencing the hardest hits amid the pandemic and are presently leading the market’s dip. Cruise line company Royal Carribean Group saw its stock devalued by at least 12%, while United Airlines Holdings fell by about 8%.
Elsewhere, European and Asian markets have not fared any better, with many indices closing in the red as a result of new COVID-19 cases and resurging fears of an economic shutdown. Oil prices have also taken a hit due to rising fears regarding a dip in energy demands.
The steep fall into the red territory came after the US documented more than 83,000 new coronavirus cases on both Friday and Saturday, with another 60,789 cases on Sunday, according to data from Johns Hopkins University.
New cases are spiking in a number of US states, including Illinois, Texas, Wisconsin, Tennessee and California. Globally, France, India, Italy and the United Kingdom are reporting massive spikes in case counts.
Frank Rybinski, chief macro strategist at investment firm Aegon Asset Management, told CNBC that “until we get some eradication of the virus, it’s going to be like a gray cloud” over the market.
“To me, this is Phase 2 of the pandemic,” he noted.
Pandemic concerns have also been heightened by prolonged, fruitless talks between US politicians over a new economic relief package. Larry Kudlow, White House economic adviser, told the outlet’s morning business talk show “Squawk Box” on Monday that negotiations had slowed but are still ongoing.
Earlier this month, hopes that a $2 trillion relief package would be cleared by the Trump administration helped to lift the stock market somewhat; however, optimism began to dim last week as politicians appeared to hit a stalemate on the matter.