What happened 

Shares of aluminum producer Alcoa (NYSE:AA) dropped a whopping 24.7% today, as investors sold off nearly every segment of the market. At the market's close, shares were down 18.1% on the day. 

So what

The impact of the coronavirus is hitting a broader range of companies on the market beyond entertainment and travel, and metals suppliers aren't being spared. The worry today is that Alcoa could be hit by a broad economic slowdown as soon as this quarter. 

Molten metal being poured at a foundry.

Image source: Getty Images.

Aluminum prices have declined some as the market has fallen but were only down about 1.4% today, so that wasn't what caused the decline in shares. It's more of a macro concern that investors have on their minds. 

Yesterday, Morgan Stanley and Goldman Sachs both predicted that we're already in a global recession; they just don't know how long it will last or how bad it will be. Since the demand for aluminum is tied to economic activity, a recession would be very bad for earnings. 

Now what

There's a lot of uncertainty in the market right now, and for metals and infrastructure companies there could be a big slowdown in demand in the coming months. Factories may also be idled to keep workers home, meaning costs will pile up without a product being made. Alcoa was already struggling with low margins before the coronavirus pandemic hit, but this will exacerbate those financial challenges and could keep pushing the stock lower. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.