US stocks fell sharply on Monday as markets reacted to the massive surge in new COVID-19 cases across the nation amid an ongoing stalemate between politicians regarding economic relief for out-of-work Americans and struggling businesses.
As has been the case for many months, travel and leisure stocks are experiencing the hardest hits amid the pandemic and are presently leading the market’s dip. Cruise line company Royal Carribean Group saw its stock devalued by at least 12%, while United Airlines Holdings fell by about 8%.
Elsewhere, European and Asian markets have not fared any better, with many indices closing in the red as a result of new COVID-19 cases and resurging fears of an economic shutdown. Oil prices have also taken a hit due to rising fears regarding a dip in energy demands.
New cases are spiking in a number of US states, including Illinois, Texas, Wisconsin, Tennessee and California. Globally, France, India, Italy and the United Kingdom are reporting massive spikes in case counts.
Frank Rybinski, chief macro strategist at investment firm Aegon Asset Management, told CNBC that “until we get some eradication of the virus, it’s going to be like a gray cloud” over the market.
Pandemic concerns have also been heightened by prolonged, fruitless talks between US politicians over a new economic relief package. Larry Kudlow, White House economic adviser, told the outlet’s morning business talk show “Squawk Box” on Monday that negotiations had slowed but are still ongoing.
Earlier this month, hopes that a $2 trillion relief package would be cleared by the Trump administration helped to lift the stock market somewhat; however, optimism began to dim last week as politicians appeared to hit a stalemate on the matter.