New York: U.S. stock futures fell sharply after the Federal Reserve slashed interest rates and more companies and governments took action over the weekend to shut down European and American society in the face of the growing virus outbreak.
Futures for the S&P 500 fell 5% Sunday night and triggered a halt in trading. The Dow Jones Industrial Average fell 1,040 points, or 4.6%. The price of oil fell more than around 2% while gold gained about 1.2%.
Stocks are set for more turbulence following a dizzying week that saw the Dow twice fall by more than 2,000 points and also record it's biggest point gain ever 1,985 points on Friday.
Asia markets were mostly lower. Hong Kong's Hang Seng index declined about 2% while shares in South Korea and China slipped less than 1%. Shares in Australia dropped 4.3%.
The country's prime minister announced new travel restrictions Sunday. Japan stocks rose slightly. The Bank of Japan has called an emergency meeting for noon local time Monday.
The Fed Sunday cut its key rate by a full percentage point to a range between zero and 0.25% and said it would keep it there until it feels confident that the economy can survive a sudden near-shutdown of economic activity in the United States.
The surprise announcement signaled the Fed's concern that the viral outbreak will depress economic growth in coming months and that it is prepared to do whatever it can counter the risks.
The fact the Fed acted before a meeting scheduled for mid-week indicated its policymakers felt they needed to move immediately to shore up financial markets and investors' confidence.
Although U.S. stocks did recoup some of last week's losses with a big rally on Friday, most market watchers expected to see more volatility ahead with the number of coronavirus cases still rising in the U.S. and more industries facing a downturn in their business.
United Airlines said it needs to cut flying capacity by 50% in April and May and expects the cuts to extend into the summer travel season.
At the same time the U.S. and other countries further restricted travel and took other actions certain to curtail economic activity. In he U.S., the Centers for Disease Control and Prevention is recommending that gatherings of 50 people or more be canceled or postponed over the next eight weeks.
JP Morgan Chase now predicts the U.S. economy will shrink at a 2% annual rate in the current quarter and 3% in the April-June quarter.
The U.S. has seen 64 deaths and more than 2,900 infections. Italy, the worst-hit European country, reported its biggest day-to-day increase in infections 3,590 more cases in a 24-hour period for a total of almost 24,747....