"This is not the beginning of a bear market but it could be the start of a correction," said Adam Phillips, director of portfolio strategy at EP Wealth Advisors. "The coronavirus continues to spread and containment remains an issue."

It's a good thing that the market is finally pricing in the risk the virus poses, he added.

"Stocks should not have been at all-time highs because of the impact of the coronavirus," Phillips said. "The biggest risk is to earnings, and you are starting to see more companies come out and guide expectations lower."

An official of the US Centers for Disease Control and Prevention said Tuesday afternoon that quarantine and travel restrictions have so far proven successful in America, but the CDC ultimately expected the number of US patients to rise.

In a speech at a conference on Tuesday, Federal Reserve Vice Chairman Richard Clarida said that the central bank is closely monitoring the Coronavirus's spread and its economic impact, adding that it is too early to speculate about its effects in detail. He added that the Fed will respond if anything triggers a material reassessment to the US economic outlook.

The safe-haven US Treasury bonds again attracted buyers and the 10-year bond yield dropped to a new all-time low below 1.32%.

Gold prices, which rallied at the start of the week, settled lower.

US and global oil benchmarks also fell further on the expectation of lower demand for energy in a coronavirus-inspired economic downturn. US oil futures settled nearly 3% lower at $49.90 a barrel, while the global oil benchmark dropped 2.4% to $54.95 a barrel.

-- Correction: A previous version of this story misidentified Mr Razaqzada's employer.

-- Paul La Monica contributed to this report.