NEW YORK, (AP) — Stocks plunged Friday after a highly transmissible variant of the coronavirus from South Africa was discovered to have spread across the globe. This could threaten months of progress in containing the pandemic.

European and British health officials quickly proposed suspending travel from southern Africa. Several cases of the variant were also found in Tel Aviv, Hong Kong and Belgium.

The Dow Jones Industrial Average fell more than 890 points to 34,886 by mid-morning. S&P 500 was 1.9% lower, marking its worst day since September. The Nasdaq Composite fell 1.8%.

Although there have been previously known coronavirus variants, the most severe was the delta. It decimated large swathes of the US during the summer. However, early data suggests that this variant is more transmissible than the other variants. 

Jeffrey Halley, Oanda’s chief executive officer, stated in a report that investors are more likely to ask questions and shoot first until they know more. This was evident in the bond market where the yield on the U.S. Treasury 10-year note fell to 1.51% on Wednesday from 1.64%. Thursday was Thanksgiving in the U.S., so the bond market was closed.

Already, the economic effects of this variant can be felt. The flight between South Africa, Europe and the USA was being quarantined or shut down completely. Airline stocks were quickly liquidated, with Delta Air Lines and United Airlines both falling over 10%.

Oil prices plunged 10%, and also dropped sharply.

VIX, Wall Street’s volatility measurement, was a sign of Wall Street’s fear. It rose 44% to 26.91, its highest reading in January since before vaccines were widely distributed.

Investors moved their money to companies that had benefited from previous waves of growth, such as Zoom Communications for meetings and Peloton for at home exercise equipment. Peloton shares rose 6%, while Zoom shares rose by about 7%.

The biggest gainers were also shares in coronavirus vaccine producers. Modern shares rose 23% while Pfizer shares rose by almost 6%

However, Merck shares fell 4%. Although U.S. officials claimed that Merck’s COVID-19 experimental treatment was effective, data revealed that the pill wasn’t as effective in keeping patients out the hospital as initially thought.

Investors worry that supply chain problems that have been affecting global markets for months could get worse. New, localized outbreaks could make ports and freight yards vulnerable.

According to Neil Shearing, an economist at Capital Economics in London, “Supply chains have already been stretched.” “A new, more deadly virus wave could lead to some workers leaving the workforce temporarily and discourage others from returning, making current labor shortages even worse.”

This variant puts additional pressure on central bankers, already facing a difficult dilemma: when and how to raise interest rates in order to combat rising inflation. Shearing stated that central banks may need to delay raising interest rates to avoid the threat of a more severe virus.

The Friday following Thanksgiving is the slowest day for stock trading. The market closes at 1 p.m. Eastern. Light trading can exacerbate Friday’s losses as there are fewer buyers or sellers.