The Dow Jones industrial average skidded 694 points or 2.5 percent, shortly after the opening bell, extending a turbulent week of selling that sent the blue-chip index further into negative territory for the month. The S&P 500 tumbled about 2.7 percent and the Nasdaq 100 gave up 2.9 percent.
The rolling seven-day average of new daily case counts in the U.S. hit a record 70,000, while coronavirus-related hospitalizations have shot up nearly 10 percent in the last week. On Tuesday, 73,627 cases were reported.
The steep losses also coincided with a failure in Washington to advance a coronavirus aid package. While discussions last week for a roughly $2 trillion deal yielded the possibility of a breakthrough, according to House Speaker Nancy Pelosi (D.-Calif.), the Republican-controlled Senate adjourned until Nov. 9, after confirming Amy Coney Barrett to the Supreme Court. The Senate recess ensured that a deal to pump hundreds of billions of dollars into the economy, with aid delivered to struggling households and floundering small businesses, would not arrive until after the election.
The uncertainty over when the next round of coronavirus relief will pass is also complicated by the election, which may change the power dynamics in Washington. Senate Republicans have rejected provisions for a larger stimulus deal even as President Trump has publicly called for greater spending. Congressional Democrat have already passed a multitrillion dollar relief bill dubbed the Heroes Act.
Investors will also parse financial results from the largest companies in technology, including Facebook, Amazon, Apple and Alphabet, which report earnings on Thursday, and will offer Wall Street the latest indication of how their businesses have fared in the middle of a pandemic. (Amazon founder Jeff Bezos owns The Washington Post.)
European markets fell sharply on Wednesday as well, following a staggering increase in covid-19-related deaths and as governments in France and Germany prepared for another round of social restrictions to contain the spread of the virus. The German DAX fell 3.7 percent, France’s CAC slid 3.3 percent, and the Pan-European Stoxx gave up 2.7 percent, all three plunging to lower levels not seen since late May.
Oil prices sank in response to the surging infections. rent crude, the international oil benchmark, fell more than 4.85 percent to trade at $39.61 a barrel.