Wall Street plunged for a second straight day on Tuesday, with the Dow Jones Industrial Average closing down 877 points after U.S. health officials warned the spread of coronavirus to America was not a matter of “if” but “when.”
The Dow’s fall follows a tumultuous Monday, which saw the blue-chip index spiral rapidly downward to end the day with a loss of 1,031 points, its worst performance in two years.
“It’s not so much a question of if this will happen any more, but rather more a question of exactly when this will happen and how many people in this country will have severe illness,” Dr. Nancy Messonnier, the head of Centers for Disease Control and Prevention’s National Center for Immunization and Respiratory Diseases, said during a media briefing Tuesday.
Traders responded immediately, with the Dow falling by more than 3 percent and the S&P 500 and the Nasdaq index both down by around 2.5 percent, as investors fled the market to bury their funds in safe havens. The VIX index, or “fear gauge,” spiked to a level of 30 for the first time since 2018.
“The Coronavirus is very much under control in the USA,” President Donald Trump tweeted earlier in the day, during a trip to India. “We are in contact with everyone and all relevant countries. CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!”
White House Economic Council Director Larry Kudlow repeated that sentiment on Tuesday, saying in an interview with CNBC, “We have contained this. I won’t say [it’s] air-tight, but it’s pretty close to air-tight.” While his comments centered on the health of the American economy and its ability to manage the outbreak, stocks extended their losses after he spoke.