Cities, states and Washington sought ways to mitigate the blow of the novel coronavirus as businesses closed, the European Union planned to shut its borders, and fears of a pandemic-induced recession kept markets on edge.

U.S. Treasury Secretary Steven Mnuchin is pitching Senate Republicans on a $1 trillion stimulus plan that would include roughly $250 billion in direct payments, according to a White House official. The Federal Reserve also took steps to prevent further strains in short-term commercial debt markets. The moves...