Stocks dropped 8 per cent in the first minutes of trading Monday on Wall Street and triggered another temporary halt to trading as huge swaths of the economy come closer to shutting down, from airlines to restaurants.
Emergency actions taken by the Federal Reserve late Sunday to prop up the economy and get financial markets running smoothly again may have raised fears even further, some investors said.
The selling was just as aggressive in markets around the world. European stocks and crude oil were both down close to 10%. The world’s brightest spot may have been Japan, where the central bank announced more stimulus for the economy, and stocks still lost 2.5 per cent. The spreading coronavirus is causing businesses around the world to shut their doors, which is draining away revenue.
That has economists slashing their expectations for upcoming months, and JPMorgan Chase says the US economy may shrink at a 2 per cent annual rate this quarter and 3 per cent in the April-through-June quarter. To many investors, that meets the definition of a recession.