US stock markets are set for their sharpest drop in weeks as concerns about the economic impact of surging coronavirus cases sent shares tumbling.
The Dow Jones Industrial Average was down about 2.5% in mid afternoon trade in New York, while the S&P 500 and Nasdaq both dropped roughly 2%.
Stocks in Europe, where major cities such as Paris have announced new restrictions, also declined.
Shares in travel firms took some of the heaviest losses.
Cruise lines Royal Caribbean Group and Norwegian both dropped more than 8%, while British Airways owner IAG closed 7.6% lower.
US President Donald Trump has vowed to avoid widespread restrictions on activity, like the lockdowns this spring, saying such limits are not worth the economic cost.
But in the US such decisions are typically handled by local leaders, some of whom, such as the mayors of El Paso, Texas and Newark, New Jersey, tightened rules on Monday.
State of the virus
Over the last week, the number of new virus cases reported daily in the US has repeatedly passed 80,000, sending the seven day average to a new high of nearly 69,000 – roughly double what it was in September.
The number of hospitalisations has jumped 40% in the past month and death rates are also rising, though more slowly.
On a per capita basis, the number of new cases in the US over the past seven days remains lower than some other countries, including the UK, Spain and France, where new restrictions have also been imposed recently.
On Monday, France’s CAC 40 ended 1.9% lower, while Germany’s Dax index dropped 3.7%. In the UK, the FTSE 100 fell nearly 1.2%.
In the US, investors are also worried about the impasse in Washington over the need to fund additional coronavirus economic relief, and trying to gauge risks related to the upcoming presidential election.
On Monday, Treasury Secretary Steven Mnuchin, who has been trying to broker a deal for the White House, said the two sides remained far apart. Congresswoman Nancy Pelosi, who leads Democrats in the House of Representatives made similar comments.