Wall Street returned from the weekend and sank into a sea of red on Monday, as investors fear that the Delta coronavirus variant could threaten the U.S. economic recovery.
At the finishing bell, on the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial fell -725.81 points, or -2.09%, to 33,962.04, logging its steepest decline since October.
During the New York session, the Dow was down -946 points before recovering some ground into the close.
The broad-based Standard & Poor’s 500 Index finished the session -68.53 points lower, or -1.58%, to end at 4,258.63.
Energy, Financials, and Industrials were the worst-performing sectors.
The technology-focused Nasdaq Composite Index tumbled -152.30 points, or -1.06%, to 14,275.0, posting its fifth-straight day of losses and worst losing streak since October.
Despite the recent volatility, stocks are not far from record highs and are having a solid year.
The Dow is still up more than +10% in 2021 and is just 3% below its all-time peak.
The S&P 500 has surged +13% this year and is also only 3% off its record high and is up nearly 90% from its COVID-induced bear market lows of March 2020.
Meanwhile, long-term bond rates continued to slide as well, a sign that fixed-income investors are now far more worried about a Delta variant-induced economic slowdown than they are about rising inflation fears.
The yield on the 10-year US Treasury sank below 1.2% for the first time since February.
Airlines American, United, and Delta were all down around -4% to -5%, while cruise operators Carnival, Royal Caribbean, and Norwegian fell between -4% and -6%.
Energy stocks also plummeted, with Chevron and Exxon Mobil both fell -8%.
COVID-19 vaccine maker Moderna, which is set to be added to the S&P 500 later this week, also rallied after surging more than +9%.
BioNTech, which makes a vaccine with Pfizer, climbed +5%.
COVID cases have rebounded in the U.S. this month, with the delta variant spreading among the unvaccinated.
According to CDC data, the U.S. is averaging nearly 26,000 new cases a day in the last seven days through Sunday, up from a seven-day average of around 11,000 cases a day a month ago.