Stocks are getting beat down on Wednesday as traders have become increasingly concerned about the rapid growth in freshly confirmed coronavirus cases, and how that will impact the economic reopening and recovery process.

The Dow Jones Industrial Average dropped 3%, while the S&P 500 traded 2.9% down and the Nasdaq Composite fell 2.6%. The Nasdaq has been making fresh highs recently and is targeting its first daily drop in nine trading sessions.

Stock index ETFs are tanking along with the underlying benchmarks. The SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) are trading all trading red Wednesday, as are most stocks and sectors.

The major averages have been dumping, reaching their lows on the day following news that Florida said its confirmed Covid-19 cases rocketed by 5,508 on Tuesday, a new record, and now total 109,014. The state also said its positivity rate climbed to 15.91% from 10.82%. The news compelled New York, New Jersey and Connecticut to order visitors to quarantine for two weeks.

“The latest coronavirus news is not positive for the stock market which was betting the worst of the pandemic recession was behind us,” said Chris Rupkey, chief dinancial economist at MUFG. “All the hopes of investors looking for a better economy to improve the bottom lines of companies shut down in the recession have been dashed. Forget about the fears of the virus coming back in the fall, the number of new cases and hospitalizations in states like Arizona, Texas, and Florida says the threat is happening right now.”

California is one of the states that has seen a dramatic spike in cases, adding more than 6,000 on Monday alone. Meanwhile in Texas, the Covid-19 hospitalization rate has notched a record for almost two week straight. This has made market strategists much more pessimistic on stocks and the outlook going forward.

The “market is going down on this…bottom line,” Evercore ISI strategist Dennis DeBusschere wrote in an email. It “brings up the question: What will California do? They have had consistent case growth and never really opened up.”

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, agreed Tuesday that the U.S. is seeing a “disturbing” spike in new Covid-19 cases.

“Markets pause with all eyes on the virus and the reopening heading into the summer months,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities, in a note.  The health side is back front and center as both monetary and fiscal liquidity has been factored in short-term. We have entered a new phase of this crisis.”

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