Ankilling five people and injuring more than 40 others, police said. Videos of the incident posted on social media showed a red SUV speeding around the parade marchers and eventually hitting a group of participants.
At a news conference Sunday night, Police Chief Dan Thompson said the SUV had been located and a person of interest was in custody.
A law enforcement official familiar with the early findings of the investigation told CBS News it appeared the suspect was fleeing another scene -- possibly a knife fight -- when he ran into the people at the parade, and the incident didn't appear to be an act of terrorism "at this time."
The FBI is assisting local authorities, who are leading the investigation.
Thompson said Sunday night that an officer fired at the SUV to try to stop the suspect. There were no reports of bystanders being wounded by that gunfire and police didn't believe any shots were fired from the SUV.
The Waukesha School District said public schools will be closed Monday but counseling services will be offered at all of them.
A family reception center was set up at Waukesha South High School.
The Milwaukee Archdiocese tweeted that one of its priests was injured "as well as multiple parishioners and Waukesha Catholic school children."
Angela Oboyle, who lives in an apartment overlooking the parade route, told CBS Milwaukee affiliate WDJT-TV she saw the SUV plow into "at least three people, running over two of them. One of the two got up. The other one did not for quite some time."
She said the car kept going down the block and went through a stoplight.
"I'm happy my kids were not here, and worried about the people who were down there and getting trampled and crushed," she said.
Waukesha Mayor Shawn Reilly called the incident a "horrible, senseless tragedy."
"My heart goes out to those injured as well as to their families," Reilly said. "My heart goes out to those who are witness to these events. My heart goes out to those who lost a loved one tonight."
Wisconsin Governor Tony Evers tweeted that he and his wife "are praying for Waukesha tonight and all the kids, families, and community members affected by this senseless act. I'm grateful for the first responders and folks who acted quickly to help, and we are in contact with local partners as we await more information."
The Milwaukee Bucks issued a statement saying the NBA team is "devastated and angry by the senseless and horrific act" that was "beyond comprehension." The team sent its condolences to families who lost loved ones and thanked first responders.
Waukesha is about 15 miles west of Milwaukee.
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