The spread of China’s dangerous virus has spooked global markets and threatened prospects for economic growth.

An outbreak originating in China and reaching beyond its borders “has summoned fresh fears, sending markets into a wealth-destroying tailspin. It has provoked alarm that the world economy may be in for another shock, offsetting the benefits of the trade truce and the geopolitical easing, and providing new reason for businesses and households to hunker down,” the New York Times explained.

U.S. stock indexes were on track to recover on Tuesday after the S&P 500 suffered its worst day in nearly four months in the previous session on fears that a coronavirus outbreak could hit global economic growth, Reuters explained.

Markets across the world stabilized as the head of the World Health Organisation said he was confident in China's ability to contain the virus outbreak that has killed 106 people, prompted businesses to close operations and curbed travel.

“It’s the uncertainty of how the global economy is going to respond to the outbreak,” Philip Shaw, chief economist at Investec, a specialist bank in London, told the Times. That will depend on the severity, the spread and the duration of the outbreak, he said, and “we don’t really know the answers to any of these questions.”

U.S. economy and markets are not susceptible to a major slowdown due to the virus outbreak because they are more domestically focused, but share prices could falter in the near-term, Citi analyst Tobias Levkovich said in a note.

However, the virus' shock is hitting just as China contends with its slowest pace of economic growth in decades, "reviving fears that its reduced appetite for the goods and services of the world could jeopardize jobs on multiple shores," the Times explained.

“China is obviously slowing down in a structural way,” Silvia Dall’Angelo, senior economist at Hermes Investment Management in London, told the Times. “The global economy is clearly more shaky, with sluggish growth. It is clearly more vulnerable to shocks.”

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