Stock futures plunge after Fed slashes rates to zero

Stock futures plummeted Sunday evening after the Federal Reserve slashed interest rates to 0 percent and announced it would purchase at least $700 billion in bonds to stabilize financial markets.

Dow Jones Industrial Average futures projected a loss of 1,100 points when trading opens Monday morning, while S&P 500 and Nasdaq composite futures fell more than 4 percent, respectively.

The steep stock losses following the Fed’s emergency intervention underscores the panic reverberating throughout financial markets and the broader economy over the toll of the novel coronavirus pandemic.

Confirmed cases of the sometimes-lethal COVID-19 respiratory illness in the U.S. climbed to at least 2,815 on Sunday, according to the New York Times, with the number almost certain to climb drastically higher. Public health officials have called on Americans to practice drastic social distancing methods to slow down the spread of the coronavirus, forcing the closure of restaurants, bars, theaters, sports leagues, and retailers across the country.

The widespread shutdown of much of the consumer economy and the panic driven by the pandemic are expected to plunge the world into a recession. While the Fed’s Sunday action could help stabilize the financial markets and ensure the flow of credit among banks, households and businesses, economists insist that a successful medical response to the pandemic and powerful fisccal stimulus is essential to protecting millions of vulnerable workers and businesses.