(NEW YORK) — Trading on Wall Street was temporarily halted after markets plunged early Monday as the novel coronavirus outbreak continues to upend business and travel across the world.
The Dow Jones Industrial Average plummeted more than 2,250 points or 9.7% just after trading began. The S&P 500 fell more than 8%, triggering a “circuit-breaker” halt of 15 minutes.
The major sell-off comes even after the Federal Reserve made a surprise announcement on Sunday that it’s slashing interest rates to near zero and spending $700 billion to buy Treasury and mortgage bonds to help buoy the economy during the coronavirus pandemic.
The intervention did not appear to be enough to quell investors’ worries about the economic impacts of the outbreak on businesses. Local governments including in New York and Los Angeles announced over the weekend they were shuttering businesses such as bars and entertainment venues.
Analysts say that investors need more than just Fed action to assuage uncertainty.
“The Federal Reserve’s emergency rate cut to zero, announcement of quantitative easing to the tune of $700 billion and swap arrangements to shore up dollar liquidity in global financial markets, are significant policy moves,” Moody’s Investor Services associate managing director Elena Duggar and vice president Madhavi Bokil said in a joint statement to ABC News. “This decision, taken together with announcements by other central banks, indicates that global monetary authorities will try to do everything in their power to arrest financial stress.”
They continued, “Nevertheless, the ability of central banks to carry the day is quite constrained compared to a decade ago. While rate cuts and QE may go some way to alleviate financial market stress, market participants are also looking for effective communication on other policy measures, including fiscal measures, to offset the health, economic and financial blow that the coronavirus pandemic has dealt.”
Over the past few weeks, U.S. financial markets have witnessed massive volatility amid the global COVID-19 pandemic.
The Dow has seesawed by more than 1,000 points since the outbreak and entered a bear market for the first time in 11 years last week. The S&P 500 index is also in bear market territory.
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