Stocks cratered on Monday, with the Dow Jones Industrial Average suffering its worst-ever loss on a point basis, as new developments in the coronavirus pandemic prompted Wall Street to prepare for the growing possibility of a deep recession amid a prolonged shutdown of public life.
However, stock futures immediately indicated that Wall Street was in for a rough session, plunging to their “limit-down” levels established by CME Group daily to prevent further extreme losses. Each dropped more than 4%, with markets surmising that the coronavirus crisis would get worse before it got better.
Many market participants had expected the Fed would vote to cut rates to a zero lower bound for the first time since the financial crisis, but anticipated it would happen at this week’s meeting. White House, Congress, states respond to outbreakStory continuesIn addition, the federal government has stepped up its response to the coronavirus, with President Donald Trump on Friday announcing a waiver on federal student loan payments until further notice, and massive crude oil purchases by the Department of Energy to fill the U.S. Strategic Petroleum Reserve “to the top,” to aid shale producers hit by the recent slump in oil prices.
Countries outside the U.S. have engaged in even more drastic measures to try and contain the outbreak. In another sweeping move by a major corporation, Apple said over the weekend it would be closing all of its retail stores outside of China until March 27. The announcement came just a day after the iPhone-maker reopened its stores in China, which had been closed for more than a month as COVID-19 spread across the country.4:03 p.m. ET: Dow closes at lowest level since May 2017 after Trump says U.S.
The remarks come just hours after the European Union announced its own measures to restrict nonessential travel into the region, effective for at least 30 days, according to European Commission President Ursula von der Leyen.12:12 p.m. ET: Fed to offer $500 billion in another overnight repurchase operationThe Federal Reserve said Monday it would be injecting hundreds of billions more in short-term funding to financial markets with another repurchase operation .
“We have updated our economic forecast and now project the U.S. economy to enter a sharp, albeit short-lived recession,” the economists said in a note. Further trading halts will be triggered if the S&P 500 falls to the following levels once trading resumes:9:30 a.m. ET: S&P 500 opens more than 8% lower, triggering trading haltThe S&P 500 sank more than 8% just as markets opened for trading, immediately triggering a 15-minute “circuit breaker” trading halt on the New York Stock Exchange intended to prevent further extreme losses.9:15 a.m.
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