NEW YORK, March 16 — Wall Street looked set to crater today 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 4.77 per cent to hit a daily down limit in early trading, and S&P 500 ETFs plunged 9 per cent, suggesting the benchmark index would set off a 15-minute cutout at 7 per 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 (RM215.2 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.
“When the investor community loses faith in the Fed, that’s when the market gets very dangerous.”
At 5.36am ET, Dow e-minis were down 1,041 points, or 4.53 per cent. S&P 500 e-minis were down 128.5 points, or 4.77 per cent and Nasdaq 100 e-minis were down 359.75 points, or 4.54 per cent.
S&P 500 ETFs were down 9.1 per cent at their lowest since January 2019. — Reuters
