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The stock market saw its worst day in months over fears that the Delta variant could spark a new wave of coronavirus infections across the United States. Investors are concerned the surge in cases could blunt the economic recovery.
The number of new daily cases has nearly tripled in the past month, rising from roughly 11,000 per day to 30,000.
The Dow Jones Industrial Average was down by 900 points during the day but closed 724 points in the red thanks to a late rally. The S&P 500 fell by 68 points, a 1.58% decline. The Nasdaq dropped by 152 points, closing the day at 14,274.98.
Airline and cruise stocks were hit the hardest, as any new surge in cases could impact travel during the summer.
Mohamed El-Erian, the chief economic adviser of Allianz and former co-CEO of Pimco, said that investors were concerned about growth in comments before the markets opened on Monday.
“You have two concerns coming together... concerns about market technicals and concerns about growth,” he told CNBC’s Squawk Box. “That’s what all the asset classes are telling you.”
The price of oil also fell after OPEC announced plans to increase production by two million barrels per day starting in August. Shares of Chevron and Exxon Mobil were down by 7%.