Stocks finished lower Tuesday after Dr. Anthony Fauci, the immunologist who directs the National Institute of Allergy and Infectious Diseases, warned senators that parts of the U.S. that disregard government guidelines in reopening their economies risk "triggering an outbreak you may not be able to control."
The Dow Jones Industrial Average declined 457 points, or 1.89%, to 23,746, the S&P 500 was down 2.05% and the Nasdaq fell 2.06%.
Fauci, testifying remotely after being exposed to a White House staffer who tested positive for the virus, made his comments during testimony before the Senate Health, Education, Labor and Pensions Committee.
Fauci said ignoring government guidelines could lead to "suffering and death" and could set back plans to reopen the economy.
“If we do not respond in an adequate way when the fall comes, given that it is without a doubt that there will be infections that will be in the community, then we run the risk of having a resurgence,” he warned.
“I would hope that by that time, in the fall, that we would have more than enough to respond adequately. But if we don’t, there will be problems.”
Fauci said reopening businesses prematurely may lead to ”little spikes” in coronavirus cases, which could result in full-blown outbreaks.
In the U.S., deaths from the virus were 80,897, according to Johns Hopkins University. States from New York to Georgia to Texas and California have begun taking steps to reopen their economies.
"The stock market has rebounded dramatically over the past few weeks, but there is still plenty of uncertainty surrounding the reopening of the U.S. economy," said Dan Russo, chief market strategist of Chaikin Analytics. "The stock market is on a short-term uptrend within the context of a longer-trend that is flat at best."
Meanwhile, rising trade tensions between the U.S. and China were pressuring the Tuesday market. The Trump administration moved late Monday to block investments in Chinese equities by the Thrift Savings Plan, a federal employee retirement fund.
Tesla (TSLA) - Get Report CEO Elon Musk said he was reopening the electric-car maker's plant in Fremont, Calif., in defiance of local coronavirus shutdown orders and that he will be on the production lines.
"Tesla is restarting production today against Alameda County rules. I will be on the line with everyone else. If anyone is arrested, I ask that it only be me," Musk said in a tweet Monday..
IPhone maker Apple (AAPL) - Get Report received a price-target lift from well-known Wedbush Securities analyst Daniel Ives, who said the rollout of the iPhone 12 this fall should “start the road to recovery” for Apple.
In a note to clients, Ives raised his one-year price target on Apple to $350 from $335 on expectations that demand for the new phone, which is expected in October, will help propel the company forward following a pandemic-led rout that saw it shutter stores globally.
Oil prices rose Tuesday, lifting U.S. crude past $26 a barrel, after Saudi Arabia said it would deepen its production cuts next month in order to more quickly mop up a glut in world supply.
West Texas Intermediate crude rose 7.91% to $26.05 a barrel.
Consumer prices in April, excluding food and energy prices, fell the most on a monthly basis in history, the Bureau of Labor Statistics reported Tuesday. Core CPI declined 0.4%, the largest monthly drop since records were took starting in 1957.
Economists had called for a 0.2% drop in core CPI.