U.S. stocks plummeted Monday as the coronavirus outbreak tests the global economy, with the disease now having spread to 30 states and taken more than 20 lives in the United States.
Shortly after opening, the New York Stock Exchange paused trading after the markets dropped more than 7%. If indexes drop 20%, the markets would be closed for the day.
Concerns over the coronavirus and the markets have sent yields on 10-year Treasury bonds to a new low of 0.3469% Monday.
In addition, U.S. oil prices tumbled Monday by more than 30% to below $30 per barrel as Saudi Arabia flooded the market to gain market share from Russia.
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The market turmoil has raised anticipation for major reactions from federal lawmakers. The Trump administration is under renewed pressure to enact emergency economic policies to stem the fallout from the spread of the coronavirus within the country. Meanwhile, the Federal Reserve, having already implemented one emergency interest rate cut in response to the market turbulence, is now expected to lower its interest rate target all the way to zero, as it did in the wake of the financial crisis. The central bank’s monetary policy committee’s next scheduled meeting is March 18.
States such as New York and Oregon have declared states of emergency in response to the virus. Oregon health officials announced Sunday seven new cases of the virus in their state. In New York, at least 90 people have been infected by the virus as of Saturday.
Fears that public events could further spread the coronavirus has led to several cancellations of conferences, movie releases, and concerts, including the South by Southwest festival in Austin, Texas, between March 16-22, and the 2020 Game Developers Conference, held in San Francisco between March 16 and 20. The State Department warned Sunday against traveling by cruise ship.
