(NBC NEWS) — Wall Street plunged again on Monday, despite emergency action from the Federal Reserve over the weekend to shore up the economy by infusing markets and Main Street with easier access to cash.
The Dow Jones Industrial Average sank by 2,200 points at the opening bell, with the S&P 500 and the tech-heavy Nasdaq fell by around 8 percent each, triggering a circuit breaker that halts all trading on the exchange floor for 15 minutes.
The chaos came just over 12 hours after the Fed unleashed a series of crisis response measures, slashing rates to almost zero on Sunday night, injecting cash into Treasurys, and announcing coordinated efforts with central banks across the world to ensure liquidity as the coronavirus pandemic takes a hold on the global economy.
But as the market absorbs the very modest effects of the Fed’s action, traders remain unconvinced that even such unprecedented measures will offset the financial blow.
“Reducing interest rates to borrowers will ease the burden of existing debts slightly but is unlikely to spur the usual surge of borrowing as consumers and businesses batten down the hatches for a coming drop off in U.S. economic activity,” said Greg McBride, chief financial analyst at Bankrate.com.
“The central banks threw the kitchen sink at it yesterday evening, yet here we are,” Societe Generale strategist Kit Juckes told Reuters. “There is a great sense that central banks are going to get to grips with the issues of getting money flowing … But the human problem, the macro problem, there is nothing they can do about that.”
That problem became more apparent this weekend, with supermarket shelves stripped bare as people stocked up for an extended home stay due to the closure of many school districts and businesses.
While President Donald Trump praised the Fed for its action on Sunday, he also noted that Americans did not need to “hoard essential food supplies.”
“You don’t have to buy the quantities because it’s hard to refill the stores,” he told reporters at the White House, after a call with the heads of grocery chains including Walmart, Whole Foods, and Target.
Manufacturing data released from China over the weekend were a troubling indication of what could happen in the U.S., with retail sales down by 20.5 percent and industrial output down by 13.5 percent.