Dow plunges 2,700 points after trading halt as Fed's emergency actions fail to calm worries over coronavirus fallout
- US stocks fell sharply on Monday as investors appear to shrug off the Fed's emergency actions Sunday amid the coronavirus pandemic.
- The S&P 500 plummeted 8.1% at the open, triggering a 15-minute market-wide trading halt. The Dow Jones Industrial Average slipped 9.7%, or 2,250 points. The selling pressure persisted once trading resumed.
- The Federal Reserve on Sunday cut its benchmark interest rate to near zero and said that it will increase bond holdings by $700 billion, among other measures.
- "Even if the Fed is able to put a floor under markets, asset prices are unlikely to begin recovering until coronavirus spread plateaus," Seema Shah, chief strategist at Principal Global Investors, told Business Insider.
- Read more on Business Insider.
US stocks fell sharply on Monday amid continued worry over the sweeping economic impact of the coronavirus pandemic.
The S&P 500 dropped 8.1% within a minute, triggering a 15-minute market-wide trading halt. The Dow Jones Industrial Average slipped 9.7%, or 2,250 points, before the stoppage occurred.
In overnight trading, futures on the S&P 500 hit a so-called limit down circuit breaker, which prevents declines of more than roughly 5%.
The market's negative reaction suggests traders aren't convinced the stimulus efforts announced by the Federal Reserve on Sunday will be enough to offset the negative economic impact of the coronavirus outbreak. Investors have been faced with an increasingly uncertain landscape as virus cases have spiked and much of the nation has gone into lockdown.
Here's where major US indexes were trading as of the market halt, shortly after 9:30 a.m. ET:
- S&P 500: 2,490.47, down 8.1%
- Dow Jones Industrial Average: 20,935.16, down 9.7% (2,250 points)
- Nasdaq Composite: 7,392.73, down 6.1%
The actions taken by the Fed on Sunday included cutting its benchmark interest rate to near zero. The central bank also said that it will increase bond holdings by $700 billion and reduce reserve ratio requirement ratios to 0%. Other central banks around the world responded with similar actions.
"The Fed has thrown most its weight behind this move, offering almost everything it has to give, which raises the inevitable question - if this doesn't work, what will?" Seema Shah, chief strategist at Principal Global Investors, said to Business Insider.
She added: "Even if the Fed is able to put a floor under markets, asset prices are unlikely to begin recovering until coronavirus spread plateaus."
Scroll down to read Markets Insider's coverage of coronavirus-driven market madness:
