By Akane Otani and Caitlin Ostroff

Growing fears of a surge in coronavirus infections sent the stock market tumbling Thursday, pulling the Dow Jones Industrial Average down more than 1,800 points for its worst day since March.

For months, investors have been betting the U.S. and other countries will be able to reopen their economies without seeing a spike in coronavirus cases that might force them to backtrack. Stocks have risen accordingly, with the S&P 500 turning positive for the year as recently as Monday.

But in the past few days, investors have gotten more signs that the smooth reopening they have been hoping for may be increasingly difficult to achieve -- throwing into doubt their hopes for a nascent economic recovery.

"It was a wakeup call," said Art Hogan, chief market strategist at National Securities, of Thursday's pullback.

Shares of banks and manufacturers were among the hardest hit. Bank of America dropped 10%, while heavy machinery maker Caterpillar fell 8.2% and aerospace giant Boeing slumped 16%.

U.S. coronavirus cases have topped 2 million, with the death toll climbing past 111,000, according to data compiled by Johns Hopkins University. States from Florida to California to Arizona to Texas are seeing increases in coronavirus cases after lifting restrictions put in place to limit the virus' spread.

Adding to investors' worries, top officials increasingly believe the economy's recovery from the pandemic-fueled recession will be slow and uneven.

"The news is getting better, but it's still really bad...it doesn't take much for the market to reset," Mr. Hogan said.

Federal Reserve Chairman Jerome Powell warned Wednesday that the labor market could take years to recover from the pandemic and millions of Americans might be unable to return to their old jobs or industries. That's despite Labor Department data last week showing the economy actually managed to add 2.5 million jobs in May, a surprising report that had sparked some optimism on Wall Street about an economic snapback.

On Thursday, data showed 1.5 million Americans applied for unemployment benefits in the week through June 6, extending a drop from a recent peak of nearly 7 million applicants in the week through March 28.

Although some economic data appear to offer signs of hope, Mr. Powell's message underscored to investors that "we're in this for the long haul," said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe.

In the initial stages of the pandemic, many investors and analysts had been predicting the economy would see a "V-shaped" recovery unfold: a relatively short period of declining economic activity, followed by a bounce back to prior levels of growth and spending.

Mr. Kassam, among others, believes that isn't likely to happen anymore.

"We're not going to recover quickly, and there will be pain ahead," he said.

The Dow shed 1,861.80 points, or 6.9%, to 25128.17. That marked the blue-chip average's biggest one-day percentage decline since mid-March, when growing fears about the coronavirus pandemic triggered a series of punishing selloffs.

The S&P 500 lost 188.04 points, or 5.9%, to 3002.10, dragged lower by all 11 sectors. The scale of the declines was so big that at various points during the trading day, the index came close to triggering a circuit breaker: a mechanism that automatically halts all stock trading for a brief period.

The technology-focused Nasdaq Composite declined 527.62 points, or 5.3%, to 9492.73, snapping a four-day streak of gains.

Shares of small, U.S.-focused companies slumped as well. The Russell 2000 index, which comprises small-capitalization companies that tend to be more sensitive to changes in the domestic economy, dropped 7.6%.

Only a few stocks managed to escape the carnage. Among the exceptions: Zoom Video Communications, whose online video chatting platform has grown in popularity as the pandemic has forced schools and workplaces to operate remotely. Shares of the company ticked up 0.5%.

The Cboe Volatility Index, also known as Wall Street's "fear gauge," surged 48% to 40.79, marking its biggest one-day increase in more than two years. The VIX tracks traders' expectations for swings in the stock market and tends to rise as stocks fall.

Meanwhile, worries about the growing number of coronavirus cases pulled stocks around the world lower, too.

The pan-continental Stoxx Europe 600 dropped 4.1%, hit particularly hard by losses among shares of banks, oil-and-gas companies and auto makers.

Yields on European government bonds fell as eurozone finance ministers met to discuss a proposed rescue package to fund the region's recovery. Investors' expectations for the size and scope of the aid package have dimmed as some EU members have pushed back against an ambitious plan recently floated by the European Commission.

Markets aren't pricing in the likely disagreement that the proposal will face from some member nations, said James Athey, senior investment manager at Aberdeen Standard Investments.

In the Asia-Pacific region, Hong Kong's Hang Seng Index fell 2.3%. Japan's Nikkei Stock Average lost 2.8%, logging its biggest one-day decline since the start of May, and Australia's S&P/ASX 200 fell 3.1%.

Some investors warned that even if the U.S. doesn't impose as broad a lockdown as it initially did after the coronavirus pandemic hit, regional measures to curtail the spread of the virus will weigh on the economy's recovery.

"There are some areas that are looking concerning, and that is one of the things that is going to get the market's attention," said Hani Redha, a multiasset portfolio manager at PineBridge Investments.

As stocks retreated, traders turned to gold and government bonds, which tend to do well during volatile pullbacks.

Gold for June delivery climbed 1.1% to $1,732.00 a troy ounce.

U.S. government bond prices rose, with the yield on the benchmark 10-year Treasury note falling to 0.651% from 0.744% Wednesday. Yields fall as bond prices rise.

Xie Yu contributed to this article

Write to Akane Otani at akane.otani@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com