Continued increasing public health threats can negatively affect cumulative abnormal return for the following reasons. First, prior studies show that environmental uncertainty will negatively influence investor valuations and investor sentiment [6,27,28]. Also, prior studies show that individual psychology is related to stock price valuation [29,30,31]. Moreover, based on the Sina-Weibo (Chinese microblogging website) content analysis, Han et al. [32] show that public sentiments are sensitively affected by the epidemic and social events. In the case of the COVID-19 outbreak in China, the continued increase in the amount of new confirmed cases in one specific provincial region will enhance the uncertainty of the firms’ short-term and long-term performance in this area, which negatively influences investor valuations of local firms.