The stock market plunged on Wednesday as Wall Street grew increasingly concerned about a spike in new coronavirus cases as states continue to lift lockdown measures.
The Dow Jones Industrial Average was down 2.5%, nearly 700 points, by mid-afternoon on Wednesday, while the S&P 500 fell 2.4% and the tech-heavy Nasdaq Composite lost 2%.
Stocks accelerated their losses after the open, taking a hit from growing fears of a resurgence in coronavirus infections across the country: Many states reopening—such as Arizona, Texas, Florida and California—have seen record spikes in new cases.
White House health advisor Dr. Anthony Fauci warned that many states are beginning to see a “disturbing surge” in new coronavirus cases, though he did remain upbeat about a potential vaccine arriving by early 2021.
Shares of companies that would benefit from the economy reopening—including retailers, airlines and cruise operators—fell across the board on Wednesday.
Royal Caribbean Cruises and Norwegian Cruise Line saw their stocks plunge over 11% following a downgrade from Barclays analysts, who warned that both companies face a “murky path” to returning to full operations.
Dell Technologies stock jumped over 12% in premarket trading after the Wall Street Journal reported late on Tuesday that the company is exploring options—including a possible spinoff or sale—for its $50 billion stake in cloud computing company VMWare.
“Stock futures are trading lower this morning and safe haven assets, including gold, are rallying as new coronavirus cases continue to rise around the world, weighing on the prospects for a continued rebound in the global economy,” according to a recent note from Tom Essaye, founder of The Sevens Report.
The Nasdaq posted its eighth straight day of gains on Tuesday, hitting a new intraday record high for the first time since June 10. The index was boosted by several big tech stocks—including Apple, Amazon and Netflix—hitting new all-time highs. The Dow and S&P both finished slightly higher, recovering from earlier losses when White House trade advisor Peter Navarro walked back his statement that the China trade deal is “over,” insisting that his comments were “taken wildly out of context” and that the Phase 1 trade deal “continues in place.”