Global stocks tumble as investors dump risk with COVID-19 cases rocketing and no US stimulus deal

• Global stocks tumbled Monday as investors dumped risk assets with COVID-19 cases rocketing in the US and Europe and the US stimulus saga dragging on.
• The US marked a new milestone in the past few days, recording about 83,700 new COVID-19 cases on both Friday and Saturday. While the fatality rate has been flat, top scientists warn that it tends to lag cases by two weeks.
• In Europe, Spain and Italy introduced their strictest measures since national lockdowns ended in May.
• "Fortunately, there are several vaccines in the pipeline, or we could have been looking at a pretty significant market reset this morning with COVID-19 flash points flaring up in virtually every corner of the globe this weekend," said Stephen Innes, the chief global market strategist at Axi.

Global stocks tumbled Monday as investors dumped risk assets while a surge of COVID-19 cases across Europe and the US dampened sentiment.

The US stimulus saga also continues to drag on, as House Speaker Nancy Pelosi and the White House chief of staff, Mark Meadows, accused each other of "moving the goalposts" on negotiations for federal coronavirus relief spending.

US futures tied to the S&P 500, the Dow Jones Industrial Average, and the Nasdaq fell 0.9%.

The US has a third peak in coronavirus infections, recording about 83,700 new COVID-19 cases — a record for a single day — on both Friday and Saturday. The fatality rate has been flat, but top scientists warn that it tends to lag cases by two weeks.

Meadows seemed to downplay the highly contagious virus in a CNN interview on Sunday by saying the US was "not going to control the pandemic."

"We are going to control the fact that we get vaccines, therapeutics, and other mitigation areas," he said.

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"With the US, Spain, and France all seeing record numbers of COVID cases, it is clear that the second wave could be worse than the first unless drastic action is taken," IG Group analysts said.

Italy and Spain announced tighter mobility restrictions over the weekend after recording a sharp rise in cases. But their announcements fell short of national lockdowns.

The Euro Stoxx 50 fell 1.5%, Germany's DAX lost 2% — largely because of steep losses in shares of the software maker SAP — while Milan's FTSE MIB index lost 0.8% and Madrid's IBEX 35 was flat.

"A combination of flat COVID-19 death rates, the avoidance of stay-home national lockdowns, and the prospect of more government support is keeping a floor under markets," said Jasper Lawler, the head of research at London Capital Group.

Numerous vaccines in the pipeline were also helping sugarcoat markets, said Stephen Innes, the chief global market strategist at Axi.

If it weren't for the promising vaccine candidates, "we could have been looking at a pretty significant market reset this morning with COVID-19 flash points flaring up in virtually every corner of the globe this weekend," he said.

Record virus cases in the US, a lack of stimulus progress, and preelection nerves also seemed to send Asian markets lower. China's Shanghai Composite fell 0.8%, Korea's Kospi fell 0.7%, and Japan's Nikkei fell 0.1%.

Oil extended Friday's losses after Libya's National Oil Corp said national output might double to 1 million barrels a day within four weeks.

Brent crude futures fell 1.75% to $41 a barrel, and West Texas Intermediate fell 2% to $39 a barrel.

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