The Dow Jones Industrial Average tanked nearly 3,000 points or approximately 13 percent, a staggering loss even as the Federal Reserve announced an emergency strategy Sunday.
U.S. stocks opened sharply lower on Monday as investors grew concerned that the emergency policy measures by global central banks over the weekend meant the economy is in much worse shape than previously believed.
Instead of soothing the markets, another emergency interest rate cut from the Federal Reserve had the opposite effect.
The S&P 500 opened down 8.1%. The index hit a circuit breaker after falling more than 7%. Trading was halted for 15 minutes.
The Dow opened 9.7%, or 2,250 points, lower and the Nasdaq Composite fell 6.1%.
Global stock markets also plunged on Monday as data showed the coronavirus outbreak has caused an unprecedented economic collapse in China.
Markets were battered across Asia, with Australia's benchmark index crashing nearly 10% in its worst day on record. In Europe, London's FTSE 100 fell 8%, while France's CAC 40 plunged over 10% and Germany's DAX dropped roughly 9%.
The European Securities and Markets Authority required short sellers to provide more information about their activities, saying the pandemic "constitutes a serious threat to the orderly functioning and integrity of the financial markets."
"There is a clear risk that such downward trend will continue in the coming days and weeks," the regulator said in a statement.
There are now more than 3,000 cases of the novel coronavirus in the United States, according to government agencies and the CDC.
Investors bailed out of stocks despite a massive intervention by the Federal Reserve on Sunday. The central bank slashed rates to close to zero at an emergency meeting, and said it would purchase another $700 billion worth of Treasury bonds and mortgage-backed securities.
The shock rate cut is designed to prevent the economic shock leading to the kind of credit crunch and financial market disruptions that occurred during the global financial crisis — the last time the Fed cut rates all the way to the bottom.
"I don't think [the Fed] would have done this unless they felt the financial markets were at significant risk of freezing up tomorrow. They're very concerned the financial markets won't work. So I don't know how the markets take solace in this," Mark Zandi, chief economist of Moody's Analytics, told CNN Business.