Shares fell sharply on Monday as fears over the worsening coronavirus and uncertainty about further fiscal stimulus rocked traders.
The Dow Jones Industrial Average fell 843 points, or 3.1%. The S&P 500 lost 2.5% while the Nasdaq Composite fell 1.6%. Monday's decline put the Dow on its worst day since June 11, when it fell more than 6%. The S&P 500 was on its way to its biggest one-day sell-off since September 8th.
Those declines contributed to a bad month on Wall Street. The S&P 500 was down more than 7% in September and the Dow was down 5.5%. The Nasdaq Composite has fallen 9.5% since the beginning of the month and has re-entered the correction area. The tech-heavy composite is now down more than 11% from its all-time high of September 2nd. The S&P 500, meanwhile, fell back towards flatline for 2020.
Concerns about another wave of coronavirus cases arose as the UK reportedly considered another national lockdown to halt an increase in infections. The country's FTSE 100 benchmark fell more than 3% due to fear. Here in the US, stocks, which would be hardest hit by another lockout, fell. Carnival Corp. fell 6.4%. Southwest Airlines and Delta Air Lines fell 5.6% and 8.7%, respectively.
"It seems like the main reason for the decline in most global equity markets is concern that tighter virus restrictions in Europe will result from the recent surge in Covid cases when the colder weather is ahead," said Matt Maley, chief executive -Market strategist at Miller Tobacco said in a note on Monday.
In Washington, negotiations on a new law to stimulate coronavirus could get more complicated following the death of Supreme Court Justice Ruth Bader Ginsburg, which could lead to a bitter nomination process ahead of the elections. Trump said he would nominate someone to take Ginsburg's place this week. Republicans and Democrats have been in a stalemate since July after the provisions of the previous stimulus bill expired.
Chris Krueger, Washington strategist at Cowen, said in a note that a new coronavirus stimulus bill is now "unlikely until after Nov. 3 as the battle for the vacant seat of Justice Ginsburg will consume DC power".
Tech stocks, which led the broader market from its coronavirus lows to record levels but hit hard so far in September, struggled again. Facebook and Amazon each fell more than 1%. The alphabet slipped 1.6%.
"In order for the market to maintain these levels, buyers must enter the technology sector for up to 10 days over the next week," said Marc Chaikin, CEO of Chaikin Analytics, in a post. "Without the impetus from buyers of call options that helped drive large-cap tech stocks to extreme valuations, the subsequent rally is unlikely to break the September high."
Bank stocks also contributed to the broader market decline after a report found that a number of global banks allegedly moved illicit funds. Deutsche Bank shares fell 9.1% while JPMorgan Chase fell 4.5%.
Meanwhile, tensions between the US and China continue to escalate. The Chinese Ministry of Commerce posted long-awaited provisions on its so-called "Unreliable Company List" the day after the US announced a ban on WeChat and TikTok.
General Motors shares fell 5.8% after Nikola founder Trevor Milton stepped down as chairman of the board. Milton's exit – which dragged Nikola shares down more than 20% on Monday – came after the two companies announced a partnership earlier this month.
The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite saw their third straight weekly decline, marking their longest weekly decline since 2019.
– CNBC's Yun Li contributed to the coverage.
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