On Monday, the Dow Jones Industrial Average closed down 1,031.54 points, or 3.55%, its biggest point drop in nearly two years. The S&P 500 also had its worst trading day since February 2018, falling 3.35% to 3,225.89 and erasing its year-to-date gains, while the Nasdaq Composite closed 3.7% lower at 9,221.28. When markets move one way or another, analysts rush to provide an explanation, despite the fact that sometimes there isn’t a simple answer for why, in Wall Street terms, things “shit the bed.” Today though, it appears pretty obvious that the biggest factor was the combination of a surge in coronavirus cases outside of China and the realization that Donald Trump has no idea what he’s doing in terms of a response, which is true in most circumstances but particularly worrisome when a deadly virus is concerned.

Over the weekend, Italy, South Korea, and Iran all reported unexpectedly sharp increases in cases. In Italy, which now has the biggest outbreak outside of Asia, there were more than 200 confirmed cases and five deaths as of Monday; in South Korea the number of infected hit 833; and in Iran, the death count jumped to 12. While investors had initially banked on the economic fallout being contained to China, as was the case in the 2002–2003 SARS outbreak, that hope was obviously misplaced (and a tad naive given how connected China is to the rest of the world and the fact that supply chains on basically every continent rely on China for labor and manufacturing). “Whatever optimism in the markets recently about the coronavirus resolving quickly has evaporated with the spread to South Korea and other countries,” John Kilduff of Again Capital told the Washington Post. “Demand for commodities of all stripes has cratered in China and aviation traffic is plummeting as well.” Gregory Daco, chief U.S. economist for Oxford Economics, noted that Monday’s market declines reflect how quickly the situation could move from a threat to supply chains to a full-out tightening of financial conditions: a sharp increase in volatility could lead to businesses pausing planned investments and today, investors pushed up the price of the U.S. dollar as they fled to safer assets. Per the Post: