Wall Street looked set to crater on Monday as fears of a coronavirus-driven recession intensified following a second emergency interest rate cut in a fortnight by the Federal Reserve.
Traders work on the floor of the New York Stock Exchange after the opening bell of the trading session in New York, U.S., March 13, 2020. REUTERS/Lucas JacksonREUTERS: Wall Street looked set to crater on Monday as fears of a coronavirus-driven recession intensified following a second emergency interest rate cut in a fortnight by the Federal Reserve.
S&P 500 futures fell 4.77per cent to hit a daily down limit in early trading, and S&P 500 ETFs plunged 9per cent, suggesting the benchmark index would set off a 15-minute cutout at 7per cent put in place to prevent another 1987"Black Monday"-style crash.Central banks in the United States, Japan, Australia and New Zealand announced sweeping monetary easing in a co-ordinated effort not seen since the 2008 financial crisis, but failed to shore up global investor sentiment.
The extent of the action, taken ahead of the Fed's regularly scheduled meeting set for Tuesday and Wednesday, spooked investors following Wall Street's attempt at a rebound on Friday as President Donald Trump declared a national emergency and earmarked US$50 billion in fiscal aid. "We're facing the loss of credibility of the central bank from a market perspective," said Michael O'Rourke, chief market strategist, Jonestrading, Stamford, Connecticut.AdvertisementAt 5:36 a.m. ET, Dow e-minis were down 1,041 points, or 4.53per cent. S&P 500 e-minis were down 128.5 points, or 4.77per cent and Nasdaq 100 e-minis were down 359.75 points, or 4.54per cent.
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