Stocks finished lower Tuesday following a strong start to the week as an increase in coronavirus outbreaks dimmed investors' hopes for a swift economic recovery.
The Dow Jones Industrial Average fell 397 points, or 1.51%, to 25,890, and the S&P 500 declined 1.08%. The Nasdaq fell 0.86% after trading higher for most of the session following intraday records for Apple (AAPL) - Get Apple Inc. Report and Microsoft (MSFT) - Get Microsoft Corporation Report.
Some investors have worried that a rise in infections could set back reopening plans and lead shoppers to cut back on their spending.
“Investors continue to look past the sustained pickup in new infections in the southern part of the U.S. as well as other parts of the world like Israel, but a sustained influx of downbeat reports could change sentiment,” said a report from Prakash Sakpal and Nicholas Mapa, senior economists at ING.
Atlanta Federal Reserve President Raphael Bostic told the Financial Times he was seeing signs that the U.S. economy was "leveling off."
"There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise," Bostic said in the interview.
European shares fell Tuesday after the European Commission forecast the euro-zone economy would contract 8.7% vs. an estimate in May that called for a slump of 7.7%.
The Nasdaq on Monday set a record on the back of rising tech shares. The index rose 2.21% to a record close of 10,433, the Dow jumped 1.78% and the S&P 500 gained 1.59%.
The number of confirmed global cases of the coronavirus has risen to 11,662,574, according to Johns Hopkins University, and deaths increased to 539,058.
The U.S. has 2,966,409 cases of the coronavirus, the most in the world, according to Johns Hopkins. Deaths in the U.S. have risen to 130,902, also the most in the world.
Anthony Fauci, the immunologist who directs the National Institute of Allergy and Infectious Diseases, said any vaccine developed to combat the coronavirus would only offer "finite" protection and wouldn't work like a lifetime measles vaccine.
“You can assume that we’ll get protection at least to take us through this cycle,” said Fauci, who also sits on the White House's coronavirus task force.
Novavax (NVAX) - Get Novavax, Inc. Report surged Tuesday after it said it was awarded a $1.6 billion contract to deliver up to 100 million doses of the company’s late-stage covid-19 vaccine candidate as part of the U.S. government’s Operation Warp Speed program.