Stocks tumbled in the U.S. and Europe as rising coronavirus infections and tougher lockdowns added to worries about the economic hit from the pandemic.

The S&P 500 Index fell 3.53% amid a surge in COVID-19 hospitalizations, especially in the Midwest.The Dow Jones Industrial Average was down 3.43% and the Nasdaq dropped 3.73%.

Energy shares sank with oil prices, and technology stocks were also among the worst performers. The VIX Index, a measure of expected U.S. equity volatility, climbed to the highest level since June.

Boeing Co. slumped to a one-month low as it announced plans for more job cuts. Microsoft Corp. was among the biggest drags on the S&P 500 as investors focused on a forecast that fell short of analysts’ highest projections, looking past a decisively upbeat profit and sales report. General Electric Co. gained after reporting a surprise profit.

The Stoxx Europe 600 Index fell to a five-month low, losing more than 3% at one point after German Chancellor Angela Merkel reached a deal for a one-month partial lockdown to curb the spread of the virus. Auto and real estate shares saw the steepest declines.

Markets in the U.S. and Europe have retreated sharply this week as virus cases surge and American lawmakers failed to agree on an economic aid package before the Nov. 3 election. Analysts are also warning about increased volatility in markets ahead of the presidential vote and in its aftermath, with some saying that a contested outcome is still a possibility.

“As you see cases rise and reduced activity across the country, that directly translates into an impact on GDP growth,” said Phil Toews, chief executive at asset manager Toews Corp. “The lack of a fiscal stimulus means people who were unemployed who were able to continue to purchase things are no longer going to be able to do that.”

Elsewhere, oil fell sharply on concern lockdowns will sap demand. Bitcoin headed to its biggest drop in almost two months after reaching the highest since January 2018.

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