This is shaping up to be the worst day for the Dow since a 943-point drop in late October.
Investors feared that the Delta coronavirus variant could threaten the US economic recovery. Shares of companies in sectors that were widely thought to benefit most from the reopening of the economy are getting hit the hardest.
Long-term bond rates continued to slide as well, a sign that fixed income investors are now far more worried about a Delta variant-induced economic slowdown than they are about rising inflation fears.
Forty-eight states are now seeing new case numbers surge at least 10% higher than the previous week, according to data from Johns Hopkins University.
Despite the recent volatility, stocks are not far from record highs and are having a solid year.
The Dow is still up more than 10% in 2021 and is just 3% below its all-time peak. The S&P 500 has surged 13% this year and is also only 3% off its record high.