Stocks fell sharply at the opening bell and continued to trade in the red. The Dow sank 270 points, or 0.9% in the late morning, while the broader S&P 500 was down 1.6%. The Nasdaq Composite fell 1.5%.
It's a shortened week for the market, which will end trading on Thursday at 1 pm ET for the Christmas holiday. Trading volumes are lower with the holiday approaching, which means that market moves tend to be exaggerated, making Monday's selloff look more like panic selling than it really is, said Edward Moya, senior analyst at Oanda.
Even so, there's reason for investors' worries: Dozens of countries across Europe, the Middle East and the Americas have announced travel bans for the United Kingdom, where the new coronavirus variant has been identified. The variant is thought to be more infectious, which could deliver a blow to the fragile economic recovery following the spring lockdowns around the world.
Oil prices also tumbled, with US futures for the commodity down nearly 4% to $47.16 per barrel.
Meanwhile back in America, Washington agreed on a $900 billion stimulus package, including enhanced jobless benefits and direct payments.
The House of Representatives is expected to vote on the deal on Monday before it goes to the Senate.
Treasury Secretary Steven Mnuchin said during an interview with CNBC that the direct deposit checks for Americans, something President Trump pushed for, will be sent out next week, calling it "much needed relief just in time for the holidays."
Getting another stimulus deal was a top priority for investors over the past months, but now that it's here, the good news is being overshadowed by the new virus developments.
The market is reflecting dynamics from earlier in the year, with companies benefiting from the stay-at-home economy, such as Zoom, performing better than those reliant on a return to pre-pandemic conditions.
Banks are also having a better day than most other sectors after the Federal Reserve green lit further share buybacks for financial institutions. JPMorgan announced a $30 billion buyback program on Friday. JPMorgan stock jumped more than 3% Monday morning.
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