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Dow plummets 726 points for worst day of 2021 as virus variants threaten global recovery

US stock market investors are feeling optimistic about the economy.

US stocks cratered on Monday as investors eyed a spike in global COVID-19 cases led by the Delta variant, throwing up a roadblock to a full recovery of the economy.

The Dow Jones industrial average fell 726 points, or about 2.1%, for its worst day since October 2020, while the benchmark S&P 500 and tech-heavy Nasdaq Composite also tumbled.

The yield on the 10-year Treasury note declined as much as 12.2 basis points to 1.177%, its lowest level since February as investors flocked to safe-haven assets.

Here’s where US indexes stood at the 4:00 p.m. ET close on Monday:

“COVID has returned to the front burner of investor concerns right now,” David Donabedian, CIO of CIBC Private Wealth, said in a note. “Last week we had high inflation readings. Now we have concerns that the rise in COVID cases is dimming the economic outlook. While the second-quarter earnings reports have so far beat expectations, this is old news now.”

Shares of airlines, cruise operators, and other travel companies slumped on concerns that the Delta variant would derail the recovery.

American Airlines and airplane maker Boeing all slipped roughly 5% each. Expedia Group and hotel chain Marriott both declined by roughly 3% each. Meanwhile, Carnival, Norwegian Cruise Line Holdings, and Royal Caribbean Cruises all fell as well.

Energy stocks tumbled, including Texas-based oil equipment maker NOV and Diamondback Energy.

Some argue the plunge on Monday is nothing to fear. The sell-off in stocks is a “healthy pullback” that will likely be short-lived and could present a buying opportunity, said technical analyst Katie Stockton of Fairlead Strategies.

In cryptocurrencies, bitcoin continued its recent slide, falling as much as 3.4% to $30,646.90. All other major cryptocurrencies – ether, cardano, ripple, dogecoin, polkadot, and solana – traded lower on Monday.

Despite the downturn, mining bitcoin has been a lot easier. The asset’s “network difficulty,” which measures how much computing power is needed to mint a new bitcoin, has plummeted.

Oil fell on news over the weekend that OPEC+ reached a deal on supply, overcoming the deadlock between Saudi Arabia and the UAE.

West Texas Intermediate crude fell as much as 8.06%, to $66.02 per barrel. Brent crude, oil’s international benchmark, dropped 7.39%, to $68.15 per barrel, at intraday lows.

Gold fell as much as 0.45%, to $1,807.56 per ounce.

Lumber gained modestly, rising 4.83% to $561.90 as supply catches up with demand. Prices are set to stay elevated despite recent declines, according to an economist,

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