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Dow Jones industrial averages plunges as Fed cuts rates

U.S. stocks plunged Monday and were briefly halted for trading after the Federal Reserve took emergency action to cushion the economy from the coronavirus pandemic that is shutting down global business and travel.

The Dow Jones Industrial Average plunged more than 2,400 points and the benchmark Standard & Poor’s 500 index dropped more than 7% — briefly triggering an automatic shock absorber for 15 minutes after the opening bell — after the central bank cut interest rates and launched a fresh round of crisis-era bond purchases.

This marked the third time in a week that circuit breakers were set off during regular trading hours following sharp losses. The S&P 500, currently down 10%, would need to fall 13% to trigger a second trading halt. 

“Investors aren’t happy because these rate cuts won’t stimulate the economy in the near term. You can’t stimulate demand if everyone is stuck in their house,” says Shana Sissel, director of investment due diligence at Orion Advisor Solutions. “This isn’t a financial failure. This is a global pandemic that affects everyone across the globe. The quickest way to ramp everything back up is to provide them with a safety net in the meantime.”

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