The tornado barreled across the city of Mobile, as lightning flashed inside and tore up residential and commercial areas, several reports said.
Bill Bunting, of the National Weather Service's Severe Storms Prediction Center, said that the damage may not yet be done.
"Conditions don't look quite as volatile over a large area as we saw on Christmas day but there will be a risk of tornadoes, some of them could be rather strong, across eastern portions of North Carolina and the northeastern part of South Carolina," he said.
Extending across the Gulf region from Texas to Florida, more than 280,000 customers remain without power, and 100,000 are without power in Little Rock, Ark., alone, ABC News reported.
At least one casualty was reported in Houston, Texas, as a tree fell onto a pickup truck, killing the driver, ABC affiliate WTRK reported. In Louisiana, a 53-year-old man died when a tree fell on his house, and a 28-year-old woman was killed in a crash on a snowy highway near Fairview, Okla., according to the Associated Press.
Further reports indicated that at least eight states issued blizzard warnings on Tuesday, as the storm intensified highway conditions for holiday travelers.
Tuesday's tornado caused an eight-foot deep sinkhole in Vicksburg, Miss. Alma Jackson told ABC News that a concrete tank that was in her backyard fell into the sinkhole.
"It's really very disturbing," she said. "Because it's on Christmas day, and then to see this big hole in the ground and not have any explanation, and not be able to cover it. And the rain is pouring down."
The last time the Gulf Coast was hit with Christmastime tornadoes was in 2009, when 22 tornadoes struck on Christmas Eve morning, weather forecasters said.
The deadliest Christmastime tornado outbreak on record was Dec. 24-26, 1982, when 29 tornadoes in Oklahoma, Missouri, Arkansas, Tennessee and Mississippi killed three people and injured 32 others, ABC News said.