U.S. stocks plunged Thursday in their worst day since the 1987 crash. The Dow Jones Industrial Average fell 10%, and the S&P 500 and Nasdaq tumbled nearly as much to join the Dow in a bear market.

The furious falls in share prices on rising fears of a global slowdown due to the rapid spread of coronavirus occurred despite a $1.5 trillion intervention in short-term funding markets by the Federal Reserve.

The S&P 500 shed more than 7% early, pushing the index into bear-market territory and triggering a 15-minute halt in trading shortly after the market’s open. The day before, the Dow Jones Industrial Average had fallen into a bear market, defined as a 20% drop from a previous high, bringing to a close the longest-ever bull market for U.S. stocks. Back in 1987, the S&P 500 tumbled 20% in what became known as the Black Monday crash.

On Thursday, the Dow industrials shed 2,352.6 points, or 10% to 21,200.62. The S&P 500 sank 260.74 points, or 9.5%, to 2,480.64. And the Nasdaq Composite slid 750.25 points, or 9.4% to 7,201.80.

Companies most exposed to the coronavirus outbreak were particularly hard hit, and airline and cruise shares helped lead the tumble. United Airlines Holdings dropped 25%, Delta Air Lines fell 21%, and Spirit Airlines tumbled 33%. Royal Caribbean Cruises plummeted 32%. On Thursday, Princess Cruises canceled all voyages for the next two months after two of its ships suffered coronavirus outbreaks.


But few parts of the market were immune. All 11 sectors of the S&P 500 tumbled, with losses led by the real estate and industrial sectors. Even companies that investors thought would reap the benefits of the virus tumbled. Clorox ended the day down 6.3%. Gilead Sciences, which has started testing a virus treatment, fell 6.1%.

The steep losses in stocks Thursday underscored that so far, there has been little remedy provided by governments and central bankers that could calm jittery investors. After markets resumed trading shortly before 10 a.m. after the second circuit breaker was triggered this week, U.S. stocks plummeted. The Fed’s announcement sent shares briefly higher before tumbling once again.

Central banks and governments around the world have tried to step up in recent weeks with efforts to help protect the economy. This week, beyond the Fed’s announcement, the European Central Bank said that it would roll out cheap loans for banks and step-up bond purchases, while President Trump’s administration outlined a series of steps to backstop the economy and certain sectors.

Even so, all three major indexes are down more than 16% for the week.


“We are beyond the logical, mathematical approach to things,” said Steven Dudash, president of Chicago-based IHT Wealth Management. “We’ve got complete overreactions going on because of the fear of the unknown.”

“When you see that, you can’t expect to see a logical response to interventions,” he said.

The stock declines followed a dizzying amount of new information Wednesday night about the economic fallout of coronavirus. In a span of just hours, President Trump announced a 30-day ban on most travel from Europe to the U.S., the National Basketball Association suspended its season indefinitely, and an increasing number of colleges suspended in-person classes.

U.S. futures tied to all three stock indexes fell to their maximum allowed decline of 5% before trading opened.


“We had so many things hitting us all at the same time,” said Tim Courtney, chief investment officer of Exencial Wealth Advisors. “With so many larger organizations and larger pieces of the economy now changing, it looks like life is going to be different for the next 30 or 60 days.”

“It’s hitting home now in a way that it wasn’t a few days ago,” he said.

Some investors were disappointed Mr. Trump didn’t clearly articulate details of how he planned to get an economic stimulus package through Congress. Meanwhile, there was concern about the lack of coordination between the federal government and the Federal Reserve.

“What you really need is confidence building,” said Hani Redha, a London-based multiasset portfolio manager at PineBridge Investments. “That comes from giving detailed communication to the market about what they’re seeing and doing to develop the sense there’s a comprehensive approach.”


Outside of the U.S., losses were broad. European equities also fell, with the Stoxx Europe 600 shedding 11.5%, its worst one-day performance on record.

In a nationwide address from the Oval Office, President Trump announced a 30-day travel ban from Europe and said he would seek $50 billion in funding to increase low-cost loans to small businesses affected by the coronavirus outbreak. Photo: Associated Press

The fall for all three U.S. indexes into bear market territory comes just weeks after they each reached all-time-highs. The S&P 500 and Nasdaq both slid into a bear market after just 16 trading days.

Volatility has reverberated across the entire market, with U.S. Treasury yields and oil prices also recently tumbling to historic lows. The yield on the 10-year U.S. Treasury finished Thursday at 0.842%, slightly up from the day before.

Brent crude, the global oil benchmark, fell 7.2% to $33.22 a barrel, reflecting concerns about lower demand for jet fuel and other types of energy.

Meanwhile, the Cboe Volatility Index, a closely watched measure of volatility in the U.S. equity market, rose to its highest level since 2008.

“Markets simply don’t know what the next steps are in terms of the virus spread,” said Edward Park, deputy chief investment officer at Brooks Macdonald. “We will see a dip in global growth in Q1 and Q2 and all the fiscal stimulus out there can’t avoid that.”

The prospects for global growth have dimmed in recent weeks, and a number of major multinational companies have said they expect their earnings to take a hit from the virus. The IHS Markit also pared its forecast for this year to 1.7%, saying this week that it expects zero growth in the eurozone, a contraction in Japan and expansion of just 4.3% in China this year.

Even with readjusted forecasts, much remains uncertain, especially after global health officials declared the virus a pandemic on Wednesday.

On Wall Street, companies and exchanges are making contingency plans. The CME Group Inc. said it will close its Chicago trading floor to preemptively avoid the spread of the virus. The New York Stock Exchange is also preparing a contingency plan in case it needs to close its iconic trading floor.

The Dow Jones Industrial Average closed Wednesday 20% below its February high, officially ending its longest bull run and entering bear-market territory. WSJ's Gunjan Banerji explains what it means and how we got here.

Elsewhere around the world, Japan’s Nikkei 225 dropped 4.4% to enter a bear market, a measurement defined as a retreat of more than 20% from a recent peak.

Traders at the New York Stock Exchange today. Photo: brendan mcdermid/Reuters

Markets are likely to remain volatile, Paul Sandhu, the Asia-Pacific head of multiasset quant solutions and client advisory for BNP Paribas Asset Management in Hong Kong, said.

“The fear coming off from the coronavirus is going to be something that continues over the next few weeks at least, “ he said.



—Joanne Chiu contributed to this article.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com