U.S. stocks plummeted at opening Thursday after President Trump’s speech Wednesday night failed to calm investors’ fears about the coronavirus.
The Dow Jones Industrial Average dropped 7.43%, for a loss of 1,749 points, at opening.
The S&P 500 and Nasdaq composite were also down at opening, 6.62% and 6.49%, respectively.
At the market opening, the price for crude oil is down by more than 7% and trading at roughly $30 a barrel.
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Before opening, the stock futures indexes hit the so-called limit down threshold by dropping more than 5% before recovering.
The market fallout will likely prompt the Federal Reserve to cut interest rates at its next meeting, on March 17 and 18, predicted Greg McBride, chief financial analyst at Bankrate.com.
“The Federal Reserve will be compelled to cut interest rates further, likely all the way to zero, but more important will be the steps they take to provide liquidity and assure proper functioning of markets. That is critical to preventing the economic and financial fallout going from bad to worse,” he said.
During his speech Wednesday, Trump said that the virus was “not a financial crisis” and then instructed the Small Business Administration to make capital and liquidity available for companies affected by the virus.
He also instructed the “Treasury Department to defer tax payments, without interest or penalties, for certain individuals and businesses negatively impacted.”
Regarding travel and trade, he imposed restrictions on Europeans entering the United States.
Trump, in his speech, “strongly” advised nursing homes to suspend all “medically unnecessary visits” and that older Americans should avoid nonessential travel in crowded areas.
He also said that China and South Korea were being monitored and that the U.S. would “reevaluate the restrictions and warnings that are currently in place for a possible early opening.”
In addition, he said that “massive amounts of red tape” have been cut in pursuit of finding a treatment for the virus.
Businesses have increasingly been affected by the pandemic. The NBA Wednesday night suspended its season after a Utah Jazz player tested positive for the virus.
