The Dow Jones Industrial Average plunged 1,464 points, or 5.86%, on Wednesday, as investor anxiety over the coronavirus outbreak pushed the index into a bear market for the first time since the 2008 financial crisis.
The S&P 500 and Nasdaq also slipped by 4.89% and 4.7%, respectively.
Wednesday's Dow close mark a drop of more than 20% from February's record high, bringing it into bear market territory, ending an 11-year bull market. A bear market forms when there's a 20% drop at the close of trading from that year's highest close, while a bull market trend refers to markets rising or that are expected to rise.
"Market participants are looking for an immediate response from governments and central banks alike to combat the economic fallout from coronavirus. Unfortunately, government response can sometimes move at a slower pace, and markets are reflecting that today," Charlie Ripley, the senior investment strategist for Allianz Investment Management, said in a commentary Wednesday.
"There is still a tremendous amount of uncertainty surrounding the impact from coronavirus, and jittery investors continue to digest the information flow as it becomes available," he added. "The gloomy tone in the market today displays disappointment from investors regarding the delayed fiscal response from the government."
The steep selloff Wednesday came as the World Health Organization officially declared the COVID-19 outbreak a "pandemic."
"WHO has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction," WHO Director Gen. Tedros Adhanom Ghebreyesus said during a news conference in Geneva. "We have therefore made the assessment that COVID-19 can be characterized as a pandemic."
Health officials have asked countries to scale up emergency health responses.
Meanwhile, the World Economic Forum announced Wednesday it was creating a COVID Action Platform with support from the WHO, calling on the business community to mobilize support to help mitigate the economic impacts of the outbreak.
"COVID-19 is causing health emergencies and economic disruptions that no single stakeholder can address," WEF Founder Klaus Schwab said in a statement. "Our best and only response to it should be to take concerted action."
Tedros added that the private sector has "an essential role to play in combating this public health crisis" and called on companies to "make full use of this platform in support of the global public health response to COVID-19."
Among the worst stock performers Wednesday was Boeing, which saw shares plummeted more than 13%. The company, already struggling due to 737 Max controversies, announced Wednesday it was implementing a hiring freeze, citing the "global disruption generated by the COVID-19 coronavirus."
Trading this week has been characterized by swings of more than 1,000 points. Markets bounced back on Tuesday, with the the Dow, S&P 500 and Nasdaq each gaining almost 5%. Tuesday's gains, however, made up for only about half of Monday's losses.
Talks of government relief to boost the U.S. economy, which could be deeply affected by the coronavirus outbreak, sparked some hope for investors earlier in the week, though details and timing of plans are shrouded in uncertainty.
"The most important question that investors need to ask is, is this a return of the banking crisis that we saw in 2008?" Jamie Cox, a financial advisor at Harris Financial Group, told ABC News Wednesday. "And that is a resounding 'No' -- we are not in that environment."
"Markets are a pricing mechanism on the future, and since there is no visibility markets are going to price for the worst outcome," he added. "Right now we are in the fog of it, so it’s really, really easy to see markets decline."
There was similar volatility after a shock event like Sept. 11, Cox noted, saying that, "After 9/11, 2 1/2 months later, and we’re back."
Cox said he predicts the market downturn will be "very scary, very sharp, but not long lasting."