The Dow Jones Industrial Average dropped over 2,000 points on Monday. It was the worst one-day point decline ever for the Dow, prompted mostly by fears over the spreading coronavirus, and a concurrent large drop in oil prices.
Shortly after opening, the New York Stock Exchange paused trading after the markets dropped more than 7%. If indexes drop 20%, the markets would be closed for the day.
Concerns over the coronavirus and the markets have sent yields on 10-year Treasury bonds to a new low of 0.3469% Monday. In addition, U.S. oil prices tumbled Monday by more than 30% to below $30 per barrel as Saudi Arabia flooded the market to gain market share from Russia.
All of this has placed the Trump administration under increased pressure to enact emergency economic policies to stem the fallout from the spread of the coronavirus within the country.
Meanwhile, the Federal Reserve, having already implemented one emergency interest rate cut in response to the market turbulence, is now expected to lower its interest rate target all the way to zero, as it did in the wake of the financial crisis. The central bank’s monetary policy committee’s next scheduled meeting is March 18.
States such as New York and Oregon have declared states of emergency in response to the virus. Oregon health officials announced Sunday seven new cases of the virus in their state. In New York, at least 90 people have been infected by the virus as of Saturday.
Fears that public events could further spread the coronavirus has led to several cancellations of conferences, movie releases, and concerts, including the South by Southwest festival in Austin, Texas, between March 16-22, and the 2020 Game Developers Conference, held in San Francisco between March 16 and 20.
The State Department warned Sunday against traveling by cruise ship.
During a very short press briefing on Tuesday, President Trump said that the White House and his administration is working with Congress and businesses to make sure hourly workers “never miss a paycheck,” as well as with the hospitality industry and cruise companies and airlines.
The briefing came as the number of cases in the U.S. continues to rise, and as stocks plunge. Before walking off stage without taking questions, the president said they would hold a “major” press conference Tuesday after he meets with members of Congress about how to address the economic fallout from the coronavirus.