Why the Fed's emergency rate cut sent stocks tumbling
The stock market tumbled Tuesday, with investors apparently rattled rather than comforted by the Federal Reserve’s decision to deliver a rare, emergency rate cut aimed at shielding the economy from disruptions caused by the global spread of COVID-19.
“I think the Fed rates cuts backfired in many ways. Instead of soothing the market, it’s reignited investors’ worst fears,” Michael Arone, chief investment strategist for State Street Global Advisors, told MarketWatch in a phone interview.
Stocks initially jumped after the Fed announced a half-point cut, but gains proved short-lived. The Dow Jones Industrial Average fell nearly 1,000 points at its session low and ended the day down 785.91 points, or 2.9%, at 25,917.41, while the S&P 500 dropped 2.8% and the Nasdaq Composite lost 3%.
Meanwhile, investors piled into haven assets, including Treasurys, driving the yield on the benchmark 10-year note below 1% for the first time ever. Yields fall as debt prices rise.
https://www.msn.com/en-us/money/savingandinvesting/why-the-feds-emergency-rate-cut-sent-stocks-tumbling/ar-BB10HfOb?li=BBnbfcN