1) they're working on a vaccine now.
2) we live in a world economy and the stock market looks to the future. Fears of a worldwide pandemic means less travel which affects airlines, cruise ships, motels, fuel, entertainment, etc. Fears of less shopping.
People are sheeple so a domino effect. Market drops, masses of people "get out before they lose everything", money goes into things like treasury notes which drops interest rates and it snowballs.
Fear can be irrational. Lots of people believe all sorts of conspiracies and the media is to blame for a lot just for the sensationalism.
I think about Katrina, or 9-11, or any other disaster, there's usually a panic driven sell off...then afterwards rebuilding takes place, so building supplies, medical supplies, equipment, etc is in demand.
Eventually once sanity is restored, the calm after the storm, with positive jobs/profits reports the market goes back up.
People who weather the storm long term win.