The Dow Jones Industrial Average lost more than 300 points, dragged down by a 3.4% drop in Caterpillar’s stock. The S&P 500 fell 0.76% with major losses from airlines and cruise lines. The Nasdaq Composite dropped 1.12% as Facebook, Apple and Tesla all closed lower. The small-cap benchmark Russell 2000 fell 3.58%, for its worst day since June.
Many regions of the world are seeing rising Covid-19 cases as highly contagious variants continue to spread, the World Health Organization said. Germany and France are extending or enforcing new lockdown measures. Concerns about the recovery come on the one-year anniversary of the market bottom. Stocks have rebounded from the market bottom with the S&P 500 rallying about 80% since the low one year ago, marking the best start to a new bull market on record.
On Wednesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen will continue their testimony to the U.S. House Committee on Financial Services. In the first joint appearance Tuesday, the pair acknowledged the richly valued asset prices in the markets, but said that they are not concerned about financial stability.