The U.S. escalated its response to the coronavirus pandemic as growing shutdowns increased fears of economic fallout, pushing the stock market to levels not seen since 2017.

The Dow Jones Industrial Average fell below 20,000 Wednesday—a demonstrable turn amid market turmoil as companies and investors prepared for a lengthy economic stall. President Trump said Wednesday the White House would be invoking the Defense Production Act, “just in case we need it.” That act, first passed during the Korean War, gives the president...