The S&P 500 fell more than 7.5% on Monday, its worst single day decline since December 2008, and the Dow Jones Industrial Average fell more than 2,000 points on a day dominated by increasing COVID-19 coronavirus-related concerns, plunging interest rates, and falling oil prices.
What began as a spat between Saudi Arabia and Russia over the weekend caused crude oil prices to post their largest single-day declines since the end of the Gulf War in 1991, sending shares of oil giants Chevron (CVX 0.96%) and ExxonMobil (XOM 0.98%) down more than 12% apiece. Financials were also among the big losers weighing on the Dow, with Bank of America (BAC 0.95%) down 14.7% and JP Morgan Chase (JPM 1.41%) down 13.5%, pressured by 10-year Treasury yields falling to below 0.5% midday.
The market was already reeling from coronavirus concerns, and there was nothing over the weekend to suggest the outbreak related panic was misguided or overdone. Markets seem to be pricing in a potential outbreak-induced recession into many industrial sectors, fearful that supply chain disruptions and poor demand will eat into future results.
Markets were in sell-mode from the open, with the exchanges halted four minutes into the trading day with stocks already down 7%, triggering a circuit breaker designed to calm investors.
It all adds up to a market that for years was able to shrug off bad news suddenly becoming overwhelmed with negative headlines, and investors rushing for the exits. With the declines the S&P 500 is now just barely above breakeven for the last year, giving up a 28% gain in calendar 2019.