U.S. stock markets fell sharply on Monday as investors worried about the impact of the Delta coronavirus variant on the economic recovery.
The sale comes as the variant continues to spread throughout the United States and around the world. Covid cases are now on the rise in all 50 states and some cities are re-considering or imposing mask warrants.
The Dow Jones Industrial Average closed down 725 points, or 2.1%, after dropping 946 points earlier today. The S&P 500 lost 1.6% and the tech-rich Nasdaq Composite lost 1.1%.
Last week, Rochelle Walensky, director of the Centers for Disease Control and Prevention, said the seven-day average of coronavirus infections increased by almost 70% in one week, to about 26,300 cases per day.
The news has come as cases are increasing even in other highly vaccinated countries, including the UK, raising fears of a wider economic downturn.
Monday’s liquidation was a reminder of market losses suffered at the start of the pandemic, with airlines and travel agencies falling hard amid fears of further travel restrictions.
American Airlines, cruise operator Carnival and United Airlines all fell more than 4%.
“A lot of it is Delta related,” Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, told Reuters. “There are also concerns that the economy will not open up as quickly as everyone thinks, and the big boom that everyone expects will be more of a pop than a boom.
“We are sadly a long way from blazing economic growth, and judging by the activity we see, we overestimate many economic reports. “
Despite the recent falls, the stock markets remain close to the records reached last week.