Stocks swiftly reversed from a Monday rally after another weekend of record-breaking novel coronavirus cases, stretching steady gains deeper into the pandemic.
The Dow Jones Industrial Average had gained more than 400 points shortly after 11 a.m. EDT on Monday, rising 1.5 percent. The Nasdaq composite rose 1.7 percent and the S&P 500 index rose 1.3 percent.
But by the closing bell, the Dow had lost all but 10 points of its Monday morning gain while the S&P and Nasdaq finished with losses of 0.9 percent and 2 percent, respectively.
Some market experts attributed the morning rise to the Food and Drug Administration announcing it would fast-track two potential vaccines for the novel coronavirus from Pfizer and German firm BioNTech. Traders may also be piling into stocks ahead of second quarter earnings reports from companies that may give optimistic outlooks for the second half of the year.
The reversal was led by a sharp decline in tech stocks that had rallied steadily over the past two weeks, driving the Nasdaq to record highs.
Monday’s wild swing comes after surge of the novel coronavirus pushed some hard-hit states beyond records for the most cases reported in a day.
Nationwide, 43 states have seen the number of cases confirmed on an average day increase in the last two weeks, and 29 states have seen hospitalizations increase. The surge has forced 80 percent of intensive care beds to be occupied in Alabama, Arizona and Georgia.
The widespread second wave of COVID-19 has raised difficult questions and choices that could have profound effects on the fight against the health crisis and the economic downturn it caused.
Teachers and the Trump administration are locked in a battle over how quickly to open schools and threats from the president to withhold federal funds from districts that remain closed. Reopening schools quickly could allow more parents to return to work, but could accelerate the spread of the virus even though it appears to pose less risk to children.
Business advocates and unions are also ramping up pressure on states to boost enforcement of mask mandates to protect vulnerable workers and reduce the need of future lockdowns.
Updated 5:41 p.m.