The market fell sharply on Monday, extending its three-week losing streak as stocks took a hit from an uptick in new coronavirus cases, declining tech shares and deadlocked stimulus talks in Congress.
The Dow Jones Industrial Average was down 2.3%, nearly 650 points, on Monday, while the S&P 500 fell 2% and the tech-heavy Nasdaq Composite dropped 1.8%.
Market sentiment took a hit after both the U.S. and Europe saw a resurgence in coronavirus cases over the weekend: The U.K. is reportedly considering another lockdown, while countries like France and Spain have seen an alarming rise in new infections.
Fears that a second wave of coronavirus could lead to further government restrictions and lockdowns caused shares of companies that would benefit from a reopening of the economy—including airlines, cruise operators and retailers—to plunge on Monday.
Technology stocks, the main source of the recent sell-off, again dragged the market lower: Shares of Apple, Amazon and Google-parent Alphabet and Facebook all fell 2% or more.
What’s more, stocks moved lower thanks to uncertainty around the next coronavirus stimulus bill, which could become more complicated after the passing of Supreme Court Justice Ruth Bader Ginsburg over the weekend.
Trump said he would nominate someone to take Ginsburg’s seat by Friday or Saturday: That’s likely to cause a heated debate between Democrats and Republicans in Washington, meaning that an agreement on a new coronavirus relief bill now looks more unlikely than ever before the November election.
Shares of electric vehicle maker Nikola, meanwhile, plunged over 20% after the company said founder Trevor Milton is voluntarily stepping down as executive chairman. The move comes after Nikola was accused of fraud by short-selling firm Hindenburg Research, and the SEC and Department of Justice are both now investigating. Shares of General Motors, which recently bought an 11% stake in Nikola, fell nearly 6% on the news.
All three major averages posted a third straight week of losses last Friday, their longest weekly losing streaks since 2019. Tech stocks have continued to struggle in recent weeks, dragging the market lower and leading to a sell-off so far in September, which is a historically volatile month for markets.