Wall Street whipsawed Tuesday, Feb. 25, with the Dow Jones industrial average digging itself into a 500-point hole after wiping out a 150-point gain, as investors have become increasingly worried that the coronavirus is spreading faster and more broadly than thought.
The plunge worsened after health officials warned that the spread of coronavirus in the United States appears inevitable. In separate briefings to lawmakers and reporters on Tuesday, officials said they were no longer assessing the outbreak in terms of if there would be community spread, but when.
The volatility followed a dismal session that saw the Dow slide more than 1,000 points in one of the steepest point losses in history. The three major U.S. indexes all posted declines of 3.5% or more on Monday.
"Stocks are due for a bumpy ride as the market assesses the growing likelihood of a broad economic downturn," said Ball State University economist Michael Hicks. "The economic fundamentals of recession in China and the increasing risk of Covid-19 clearly point to more losses. This is not just a few spooked investors."
The Standard & Poor's 500 and Nasdaq composites were both down roughly 1.6% at midday.
Japan's Nikkei index sank more than 3%. The Shanghai Composite Index was down roughly 0.6%, and Hong Kong's Hang Seng was essentially flat. In Europe, Britain's FTSE sank 1.15% and Germany's DAX was roughly 0.8% in the red.
Meanwhile the yield on the 10-year Treasury note, a key benchmark, fell to 1.32% as investors fled to safety amid concerns the Sanders' praise for communists roils race global economy is pulling back. Yields drop as the price of bonds rise.
The pneumonia-like illness has spread rapidly since emerging in late December, with China confirming 77,658 cases and 2,663 deaths. Iran confirmed 95 cases and at least 15 deaths. And South Korea reported 144 new cases, bringing its toll to 977.
Shares of Moderna, the Massachusetts-based drugmaker, surged 10% Tuesday on reports that it had shipped the first batch of a coronavirus vaccine to U.S. government researchers. The share price had skyrocketed as much as 15%.
The Wall Street Journal reported Monday evening that Moderna had sent vials to the National Institute of Allergy and Infectious Diseases in Bethesda, Maryland. The Institute told the Journal that it expects to start a clinical trial of 20 to 25 healthy volunteers by the end of April.
Much is still unknown about the novel coronavirus virus and the illness it causes, prompting a rush to produce a vaccine and test its safety and efficacy. That push isn't only coming from private biotech firms. Late Monday, the White House asked Congress for $1.8 billion in emergency spending to boost its coronavirus response.
"The administration believes additional federal resources are necessary to take steps to prepare for a potential worsening of the situation in the United States," wrote Acting White House Office of Management and Budget director Russell Vought in a letter to congressional leaders.
Separately, President Trump said Tuesday the U.S. stock market would crash if he doesn't win reelection. Trump routinely cites the strength of the U.S. markets, which have long been trading at or near record highs, as a barometer of his presidency. From the White House to the campaign trail, he touts that success as one of his chief accomplishments.
Speaking at a business round table during his 36-hour visit to India, Trump said the markets would see a boost if he wins in November. But "if I don't win, you're going to see a crash like you've never seen before," Trump said.
This article was written by Rachel Siegel, a reporter for The Washington Post.