Stocks Keep Falling Despite Another Trading Halt And Fed's Sudden Rate Cut


US-ECONOMY-NYSE



    Topline: The stock market plunged again on Monday, with steep losses triggering an early halt in trading even after the Fed’s massive interest rate cut did little to stem Wall Street fears over slowing economic growth due to the coronavirus pandemic.
    • The Dow Jones Industrial Average is down almost 10% on Monday morning, while the S&P 500 and Nasdaq both dropped by over 9%.
    • Mounting losses briefly triggered the market’s circuit breaker mechanism, halting trading soon after opening: Pre-market futures showed that would happen, with all three major indexes hitting their limit-down levels of 5% or lower.
    • The market sell-off comes even after the Federal Reserve on Sunday night cut interest rates to zero and announced that it would purchase $700 billion in government debt in an extraordinary effort to stabilize the U.S. economy. 
    • The new target benchmark for the federal funds rate is now at its lowest level since 2015, sitting between 0.0% and 0.25%—and marking a huge drop from the previous target of between 1.00% and 1.25%. 
    • In a press conference on Sunday night, Fed chair Jerome Powell said that the coronavirus “presents significant economic challenges.”
    • The move comes after the Fed said last Thursday that it would inject $1.5 trillion into the overnight repo market—a bid to preserve liquidity in the banking system—as coronavirus continues to roil markets.

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