U.S. stocks traded choppily and then sold off after the Federal Reserve delivered an emergency rate cut Tuesday morning.
Earlier, stocks had opened lower after Group of Seven policymakers released a statement with few specific details about their efforts to address the coronavirus outbreak, disappointing investors seeking a concrete, coordinated global response.
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4:06 p.m. ET: Dow ends nearly 800 points lower, giving back more than half of Monday’s gains
Each of the three major stock indices ended Tuesday’s session off more than 2.5%. The Dow shed nearly 800 points, reversing Monday’s more than 1200-point advance.
Here’s where the markets settled at the end of regular equity trading:
S&P 500 (^GSPC): -2.81% or -86.86 points to 3,003.37
Dow (^DJI): -2.94% or -785.91 points to 25,917.41
Nasdaq (^IXIC): -2.99% or -268.08 points to 8,684.09
Gold (GC=F): +2.59% or +$41.30 to $1,636.10 per ounce
10-year Treasury (^TNX): yielding 1.013%, down 7.5 bps
3:46 p.m. ET: Google cancels in-person attendance at annual conference due to coronavirus, CNBC reports
Google is scrapping its annual Google IO developer conference as the coronavirus outbreak continues to mount, CNBC reported Tuesday, citing a company spokesperson. This comes after the internet giant on Monday announced its Google Cloud Next 2020 event due to take place in San Francisco in early April would just be held virtually.
Google’s recent moves put it in the company of peer big tech corporations and other major institutions that have canceled major events due to the coronavirus. Facebook said last week it was canceling its yearly F8 software developer conference.
2:12 p.m. ET: Dow tumbles more than 950 points as losses accelerate
Stocks sank further with less than two hours left of the regular trading session.
Here were the main moves in markets, as of 2:12 p.m. ET:
S&P 500 (^GSPC): -3.38% or -104.49 points to 2,985.74
Dow (^DJI): -3.5% or -974.69 points to 25,728.63
Nasdaq (^IXIC): -3.84% or -341.86 points to 8,607.27
Crude oil (CL=F): +0.09% or +0.04 to 46.79 a barrel
Gold (GC=F): +3.23% or +51.50 to 1,646.30 per ounce
10-year Treasury (^TNX): yielding 0.952%, down 13.4 bps
1:46 p.m. ET: 10-year yield dips below 1% for the first time on record
The yield on the benchmark U.S. 10-year note hit an all-time low of less than 1% during Tuesday’s session and dipped to as low as 0.9957%, according to Bloomberg data.
The decline was followed by a further sell-off in stocks, with the Dow sinking more than 700 points. Each of the three major stock indices was off more than 2.5% during the afternoon session.
1:38 p.m. ET: Dow falls more than 600 points after Fed rate cut
Stocks continued to fall into Tuesday afternoon, with the Dow plunging more than 600 points after the Federal Reserve made an emergency cut to interest rates.
Here were the main moves in markets, as of 1:38 p.m. ET:
S&P 500 (^GSPC): -2.03% or -62.59 points to 3,027.64
Dow (^DJI): -2.30% or -612.85 points to 26,090.47
Nasdaq (^IXIC): -2.16% or -193.44 points to 8,758.72
Crude oil (CL=F): +0.39% or +0.18 to 46.93 a barrel
Gold (GC=F): +3.24% or +51.60 to 1,646.40 per ounce
1:20 p.m. ET: Benchmark Treasury yield pares some losses after hitting record low
The yield on the 10-year U.S. Treasury note pared some losses after hitting an all-time low of 1.02% earlier during Tuesday’s session, driven by a flight to safe-haven assets including government debt amid concerns over the economic impact of coronavirus outbreak.
As of 1:22 p.m. ET, the 10-year yield was down 6.2 basis points to 1.026%.
Yields declined more steeply on the shorter end of the yield curve. The three-month yield slumped 19.8 basis points to 0.971%, and the two-year yield fell 9.5 basis points to 0.731%.
12:39 p.m. ET: Wall Street mixed on Fed decision to cut rate between meetings
Market pundits were mixed in their reactions to the Federal Reserve’s rare inter-meeting rate cut, and whether it was the appropriate response to uncertainty surrounding the coronavirus outbreak.
Here’s what some analysts and strategists had to say in statements to Yahoo Finance:
“Make no mistake this is a big deal—it’s a move that’s only happened about a half dozen times, and all during extremely perilous market conditions, which raises the question of if today’s market is similar. I don’t think many market observers would say we’re in conditions like we were in 2008, so the Fed’s move is certainly eyebrow-raising, albeit welcomed. To be sure, the Fed can’t stop the virus, or fix broken supply chains, but as Powell said they have tools in their tool chest and they will use them when necessary. And if today is any indication, they mean business.” — Mike Loewengart, vice president of investment strategy for E-Trade Financial
“The Federal Reserve cut interest rates 50 bps to 1.25 percent in a move that looks rushed to us and not properly considered. Moving between meetings with a bigger than normal interest rate cut looks like Fed officials are panicking as much as stock market investors did last week. They did not need to be so aggressive and the Fed under Powell keeps responding wrongly in our view more to the financial markets than they are to the broader economy ... It looks like the Fed is panicking. They risk breaking the financial system and changing forever the way Americans spend and save and borrow and invest.” — Chris Rupkey, chief financial economist at MUFG Union Bank
“While today’s decision strays from Fed commentary last week, it underscores the Fed’s decision to get ahead of any economic risks posed by a potential viral outbreak in the U.S. Overall, it appears the Fed has gone down the path of taking out more insurance from market risks in the form of rate cuts in order to keep extending the current economic expansion.” — Charlie Ripley, senior investment strategist for Allianz Investment Management
“As we continue down this uncharted path, it’s likely that history will be written one of two ways: either the COVID-19 outbreak will be as bad as currently expected and this action will be viewed as necessary and appropriate as the economy attempts to weather the upcoming demand shock or the coronavirus will prove to be less of a threat to the US economy than is currently feared, and this action may ultimately be judged to be the cause of an equity melt-up fueled by too-low interest rates, analogous to the one of the late 1990’s.” — Chris Zaccarelli, chief investment officer for Independent Advisor Alliance
11:30 a.m. ET: Stocks hit lows of the day
The three major indices hit their lowest levels of the session so far around 11:30 a.m. ET, even after the Federal Reserve delivered an emergency monetary policy move investors had hoped would transpire amid the coronavirus outbreak.
Here were the main moves in markets, as of 11:32 a.m. ET:
S&P 500 (^GSPC): -1.55% or -48.03 points to 3,042.2
Dow (^DJI): -1.79% or -476.81 points to 26,226.51
Nasdaq (^IXIC): -1.48% or -132.53 points to 8,819.63
Crude oil (CL=F): +1.33% or +0.62 to $47.37 a barrel
Gold (GC=F): +2.61% or +$41.70 to $1,636.50 per ounce
10-year Treasury (^TNX): yielding 1.036%, or -5.2 bps
11:18 a.m. ET: Stocks drop after Fed Chair Powell press conference
Stocks fell after Federal Reserve Chair Jerome Powell delivered a press conference discussing the Fed’s emergency move to cut benchmark interest rates by 50 basis points. The Dow declined more than 1%, or 300 points.
As the coronavirus outbreak continued to spread, “the risks to the U.S. outlook have changed materially,” Powell said Tuesday. While noting that nobody knows how long the outbreak will ultimately last, Powell said he “fully expect[s]” the U.S. economy “will return to solid growth and a solid labor market” in the wake of any hit from the coronavirus.
Powell also maintained that the Federal Reserve remains in “active discussion” with central banks around the world. Powell, a participant in this morning’s call between G7 finance ministers, said the group’s statement earlier this morning reflected “coordination at a high level” between global policymakers in attempting to address the economic impacts of the coronavirus.
10:51 a.m. ET: Trump calls for further easing after Fed rate cut
In a Twitter post Tuesday morning, President Donald Trump acknowledged the Federal Reserve’s surprise emergency monetary policy move, but demanded that the central bank deliver further easing. Trump’s statement restates his numerous previous calls for looser monetary policy.
The Federal Reserve is cutting but must further ease and, most importantly, come into line with other countries/competitors. We are not playing on a level field. Not fair to USA. It is finally time for the Federal Reserve to LEAD. More easing and cutting!— Donald J. Trump (@realDonaldTrump) March 3, 2020
10:23 a.m. ET: Stocks fluctuate after Fed announces surprise rate cut
Stocks traded choppily as investors digested the Fed’s unexpected rate cut. Each of the three major indices turned momentarily negative, and the Dow briefly sank more than 200 points before recovering.
Here were the main moves in markets, as of 10:23 a.m. ET:
S&P 500 (^GSPC): +0.39% or +12.01 points to 3,102.24
Dow (^DJI): +0.08% or +20.5 points to 26,723.83
Nasdaq (^IXIC): +0.24% or +29.29 points to 8,987.54
Crude oil (CL=F): +1.6% or +0.75 to $47.50 a barrel
Gold (GC=F): +1.86% or +$29.60 to $1,624.40 per ounce
10-year Treasury (^TNX): yielding 1.101%, or +1.3 bps
10:11 a.m. ET: Stocks jump after Federal Reserve announces emergency 50 basis point rate cut amid coronavirus outbreak
The Federal Reserve unexpectedly delivered an emergency rate cut Tuesday morning, bringing the target band for benchmark interest rates down to between 1.00% and 1.25%, from the band of 1.50-1.75% previously.
The move was an apparent response to the mounting coronavirus outbreak. In a statement, the Fed said, “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity.”
The vote for the rate cut was unanimous, the Fed said.
Stocks immediately reversed earlier losses. The Dow rose more than 200 points just after the statement was posted at 10 a.m. ET, after earlier being down by more than 350 points. U.S. Treasury yields added to gains on the long end of the curve, with the U.S. 10-year yield up more than 5.1 basis points to 1.137%, and the 30-year yield up 7.2 basis points to 1.171% as of 10:11 a.m. ET.
Fed Chair Jerome Powell is set to hold a press conference at 11 a.m. ET.
9:45 a.m. ET: G7 letdown shows officials ‘shooting blanks’ vs. outbreak
The coronavirus panic is growing with each passing day, and raising the stakes for central banks and governments to prevent a global recession. The Group of Seven’s tepid statement on Tuesday morning — which came just as stock futures rallied on hopes of coordinated action — underscored what Bleakley’s Peter Boockvar says are officials who appear to have run out of policy ammunition:
If you had any wonder what drove yesterday’s incredible rally, just look at all the travel and tourism stocks which were essentially flat to down implying that it was all about hopes for the Fed and other central banks. Between the Treasury market over the past week and stocks yesterday, markets have so intimidated the Fed into acting that they now have no choice but to act. As for the ECB, while they have good intentions too, they found a way yesterday to say with a straight face that in response to the “fast developing situation” of the coronavirus spread, “We stand ready to take appropriate and targeted measures, as necessary and commensurate with the underlying risks.”
With the Federal Reserve and ECB indicating they’re poised to cut, Boockvar thinks central banks are...”shooting blanks”:
The risk again with all of this is that the help to financial markets ends up being fleeting as investors focus instead on the economic situation and not a slightly lower cost of capital and I'll argue that is a much worse potential situation here for central bankers and the markets than instead disappointing the markets by being honest and saying rate cuts won't help fight the economic impact of the virus. Don't forget about the last two rate cutting cycles where the fundamentals dominated no matter how many times the Fed tried to fight it. Bottom line, shooting blanks is the real risk.
9:36 a.m. ET: Stocks open lower after disappointing G7 statement
U.S. stocks fell just after market open Tuesday on the heels of a massive rally Monday. Stock futures had pared gains in early trading after a statement from G7 finance ministers stopped short of promising concrete fiscal or monetary policy actions to address the coronavirus outbreak.
In the S&P 500, the Financials and Energy sectors lagged. Shares of JPMorgan Chase, Exxon Mobil and Intel were the biggest losers in the Dow just after market open.
Here were the main moves in market, as of 9:36 a.m. ET:
S&P 500 (^GSPC): -0.48% or -14.89 points to 3,075.34
Dow (^DJI): -0.53% or -141.91 points to 26,561.41
Nasdaq (^IXIC): -0.45% or -43.93 points to 8,904.49
Crude oil (CL=F): +2.29% or +1.07 to $47.82 a barrel
Gold (GC=F): +0.65% or +$10.30 to $1,605.10 per ounce
10-year Treasury (^TNX): yielding 1.134%, or +4.4 bps
9:12 a.m. ET: New York City high school closes Tuesday amid suspected coronavirus case
New York City-based SAR Academy and SAR High School said in a statement that school would be closed Tuesday as a precautionary measure, due to a suspected coronavirus case.
The Center for Disease Control and Prevention reported 91 cases of COVID-19 in the U.S. as of Monday.
8:41 a.m. ET: G7 response ‘raises the risk that central banks will disappoint markets’ expectations in the months ahead,’ analyst says
The G7 statement after finance ministers’ conference call this morning extinguished investor hopes for swift monetary and fiscal policy action. It could suggest further disappointments are down the line, according to Jennifer McKeown, head of global economic service at Capital Economics.
Here’s what she had to say about the statement:
The G7 statement falls short of hopes of a coordinated policy response and raises the risk that central banks will disappoint markets’ expectations in the months ahead. The statement that G7 countries are committed to “use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks” and that central banks will “continue to fulfil their mandates, thus supporting price stability and economic growth while maintaining the resilience of the financial system” adds little to what we had already heard from national central banks and governments. This is a disappointment compared to previous hopes of an immediate and coordinated fiscal package and interest rate cuts, although such hopes had already been dampened by information leaked from “G7 officials” early this morning.
7:47 a.m. ET: Stocks futures pare gains after G7 policymakers release statement
Following a conference call Tuesday morning, G7 finance ministers and central bank policymakers said Tuesday they were “ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy” amid the coronavirus outbreak, according to a statement.
Stock futures immediately pared gains after the statement, which provided no specific actions the officials were set to take in the face of the mounting outbreak. Contracts on the S&P 500, which had been higher earlier in the overnight session, turned slightly negative as of 7:47 a.m. ET.
7:39 a.m. ET: Target’s guidance misses expectations, overshadowing 4Q earnings beat
Big-box retailer Target (TGT) posted better than expected fourth-quarter earnings results, but its outlook for the full-year disappointed Wall Street’s expectations. Shares fell 1.5% in early trading.
Target delivered fourth-quarter adjusted earnings per share (EPS) of $1.69, or three cents ahead of consensus, according to Bloomberg data. Same-store sales grew 1.5% in the quarter, matching expectations. Revenue of $23.40 billion was slightly short of expectations for $23.44 billion.
Target said it expected full-year adjusted EPS of between $6.70 and $7.00, below expectations for $6.94.
In light of the mixed report, the company touted its digital sales growth, which increased 29% in 2019. This was the sixth straight year that digital sales grew by more than 25%, and came along with overall comparable sales growth of 3.4% for the year.
"With eleven consecutive quarters of positive comparable sales growth, driven by healthy performance in both our stores and digital channels, Target's results demonstrate that we've built a sustainable business model that drives strong topline growth and consistent bottom line performance," Brian Cornell, chairman and CEO of Target, said in a statement.
7:18 a.m. ET: Stock futures rise, adding to Monday’s record gains
U.S. stock futures were higher Tuesday morning, adding to major advances Monday that had sent the Dow up by its largest one-session point advance in history.
Hopes for a coordinated global response to the coronavirus helped buoy risk assets, sending the Dow more than 100 points higher in early trading. G7 policymakers are expected to release a statement sometime after their conference call Tuesday morning eastern.
The call comes shortly after Bank of England Governor Mark Carney – who will attend the call – said Tuesday that finance chiefs were creating a “powerful and timely” response to support the world economy in the face of the coronavirus outbreak, which would likely include both fiscal and monetary policy measures. And on Monday, France’s Finance Minister Bruno Le Maire asserted G7 leaders would seek “concerted action” in the matter.
The U.S. Federal Reserve on Friday had also issued a release on the coronavirus last Friday, saying the central bank would “use [its] tools and act as appropriate to support the economy” as the outbreak spreads. Fed Chair Jerome Powell is also set to attend the call, along with U.S. Treasury Secretary Steven Mnuchin.
Here were the main moves during the pre-market session, as of 7:18 a.m. ET:
S&P 500 futures (ES=F): 3,077.75, up 12.75 points or 0.42%
Dow futures (YM=F): 26,651.00, up 183 points or 0.68%
Nasdaq futures (NQ=F): 8,855.25, up 64 points or 0.73%
Crude oil (CL=F): $48.14 per barrel, up $1.39 or 1.39%
Gold (GC=F): $1,604.40 per ounce, up $9.60 or 0.60%