The rate cut looked like a panic move, so instead of encouraging people to buy stock, instead they sold--in droves so huge that many took big short positions. That means they sold positions of stock that they didn't really have in advance, anticipating a price drop, so they could cover (i.e. buy back) their speculation sales later at a rate lower than their sells.
When the snowball effect of panic sales lowering the market didn't continue as they expected, they had to buy those stocks back that they had sold in advance. In many cases, they would have had to do this even if it meant buying them back at prices higher than their sale price. Selling short is wise if you have a REALLY solid reason to think whatever you are selling will indeed drop in price. If it's only a knee-jerk reaction to something, you are better off not making that kind of a speculation. A lot of players speculated here where the shouldn't have, and sold stock they didn't have when there was no pressing reason to think they would go into free-fall, which, indeed, they didn't. I think the appropriate expression here is "oops."
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