Global stocks have plunged again despite central banks around the world announcing a coordinated effort to ease the effects of the new coronavirus.
The Dow Jones index closed 12.9% down after President Donald Trump said the economy “may be” heading for recession.
Meanwhile, London’s FTSE 100 ended 4% lower, and other major European markets saw similar slides.
On March 15, the Fed cut its interest rates by 100 basis points to a target range of 0% to 0.25% and said it would offer at least $700 billion for support to the markets in the coming weeks.
The move was part of coordinated action announced alongside the eurozone, the UK, Japan, Canada, and Switzerland.
It comes as local officials across the US shut schools, restaurants and bars, sports leagues cancel tournaments, and retailers such as Urban Outfitters, Nike, and Gap announce hundreds of temporary store closures.
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Speaking after the announcement, Fed chairman Jerome Powell said: “The virus is having a profound effect.”
Investors are worried that central banks now have few options left to combat the impact of the pandemic.
In New York, steep falls as markets opened triggered another automatic halt to trading, which is meant to curb panic selling. Before last week, such halts, known as circuit breakers, had not been used in more than two decades.
However, the sell-off continued after the 15-minute suspension, with the Dow losing nearly 3,000 points or 12.9%, its worst percentage drop since 1987.
The wider S&P 500 dropped 11.9%, while NASDAQ dropped 12.3%. All three indexes are now down more than 25% from their highs.
In London, companies in the travel sector saw big falls. Share in holiday company Tui sank more than 27% after it said it would suspend the “majority” of its operations. BA-owner IAG fell more than 25% after it said it would cut its flight capacity by at least 75% in April and May.
The FTSE 250, which includes a number of well-known UK-focused companies, ended down about 7.8%.
All the main European share indexes fell sharply, though they later regained some ground. France’s Cac 40 index fell more than 5.7% and Germany’s Dax dropped more than 5.3%.
In Asia, Japan’s benchmark Nikkei 225 closed down 2.5% and the Shanghai Composite in China ended the day 3.3% lower.
Oil prices, which have been shaken by a price war between exporters, fell again. Brent crude dropped by more than 10% to less than $32 a barrel while West Texas International crude fell more than 8% to less than $30 a barrel.
