U.S. stocks tumbled Monday after a significant rise in coronavirus cases outside of China revived concerns about a potential economic fallout from the outbreak.
The Dow Jones industrial average plunged 880 points, or 3%, erasing its gains for the year. The Standard & Poor's 500 slid 2.9%, but is still sitting within 4.5% of its record set on Wednesday. The technology-heavy Nasdaq Composite shed 3.4%.
Global stocks were pummeled after South Korea reported 231 new cases of the deadly virus Monday, bringing the country's total to 833 cases. China reported 409 new cases, raising the mainland's total to 77,150. The 150 new deaths from the illness raised China's total to 2,592. Elsewhere, a surge in reports of new cases in Iran and Italy raised the prospect of more disruptions.
"Many investors remain complacent about the far-reaching impact of coronavirus, which is continuing to spread - and a faster pace," Nigel Green, chief executive and founder of financial consultancy deVere Group, said in a note. "This will inevitably hit financial markets and investors' complacency leaves many wide open to nasty surprises."
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The latest developments raised fresh worries that the outbreak could threaten to derail global growth. Investors fear that production delays in China due to the virus could force multinational companies to cut their earnings outlooks.
"The most worrying thing about the outbreak is that we have no idea how long it will last," Adam Vettese, analyst at multi-asset investment platform eToro, says in a note. "That causes huge problems for firms that operate cross borders, such as airlines, or who rely heavily on global supply chains, such as manufacturers and healthcare companies."
Expectations have climbed among traders that the Federal Reserve will cut interest rates this year to help cushion the U.S. economy. Fed-funds futures, used by investors to place bets on the course of the central bank's policy, showed 90% of the market on Monday priced in at least one rate cut this year, up from a 58% probability a month ago, according to data from CME Group.
On Monday, Dow components UnitedHealth and Nike were among the biggest decliners in the blue-chip average, shedding 7.2% and 4.2%, respectively.
Financial stocks sold off as worries about the global spread of the virus sent bond yields tumbling. Shares of JPMorgan Chase, Goldman Sachs and Bank of America fell 2.8%, 2.5% and 4.3%, respectively.
The yield on the 10-year Treasury, which is a benchmark for mortgages and other kinds of loans, was at 1.37%. That yield was close to 1.90% at the start of this year.
Investors also flocked to other safe-haven corners of the market. Gold prices jumped 1.9% to $1,681.10 per ounce.
Commodity prices slumped over the outbreak's impact on demand for crude oil. U.S. oil prices slid 4.5% to $50.98 per barrel on the New York Mercantile Exchange. Brent crude, the international benchmark, shed 5.6% to $55.20 per barrel.
In Europe, the Stoxx Europe 600 index fell 4% while Italy's FTSE MIB shed 6%. Benchmark stock indexes in Hong Kong and Sydney fell 1.8% and 2.3%, respectively.
The Associated Press contributed to this article.
This article originally appeared on USA TODAY: Coronavirus: Dow plunges 880 points as cases outside China jump