U.S. stocks plunged on opening Monday as a second emergency rate cut by the Federal Reserve failed to reassure investors panicked by the coronavirus pandemic.
The Dow Jones Industrial Average dropped more than 2,200 points, or about 9.7%.
The S&P 500 fell more than 7%, triggering an automatic halt in trading at the New York Stock Exchange.
“Markets are still in turmoil, despite another emergency action from the Federal Reserve,” said Greg McBride, chief financial analyst at Bankrate.com.
The Federal Reserve on Sunday lowered its benchmark rate to near zero and announced large purchases of government bonds to protect the economy against the coronavirus pandemic. With that move, it is back to the emergency stance it adopted in the wake of the financial crisis.
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Yet futures contracts dropped suddenly after the central bank’s announcement and Fed Chairman Jerome Powell’s press conference.
“The virus is having a profound effect on people in the United States and around the world,” Powell said.
European stocks fell dramatically Monday. British stocks opened down 7%, similar to drops seen in Germany and France.
The markets have seen extreme volatility in recent weeks as businesses and investors have tried to reckon with the fallout from the pandemic. U.S. stocks have entered bear territory, meaning that they are down more than 20% from the recent peak, for the first time since the financial crisis.
