Stock futures sink after rate cut, new virus restrictions

NEW YORK (AP) — Stock markets are set for ar week of turbulent trading as U.S. index futures fell sharply after Federal Reserve slashed interest rates and more companies and governments took action over weekend to shut down European and American society.

Futures for S&P 500 and Dow Jones Industrial Aver fell 5% Sunday night, triggering a halt in trading. price of oil fell about 5% while gold gained about 2%.

Stocks are coming off a dizzying week that saw Dow twice fall by more than 2,000 points and also record it’s biggest point gain every — 1,985 points on Friday. bull market that began in 2009 in depths of financial crisis came to an end. Europe markets suffered similarly sharp declines.

Fed cut its key rate by a full percent point — to a range between zero and 0.25% — and said it would keep it re until it feels confident that ecomy can survive a sudden near-shutdown of ecomic activity in United States. surprise anuncement signaled Fed’s concern that viral outbreak will depress ecomic growth in coming months and that it is prepared to do whatever it can counter risks.

fact Fed made its move before a meeting scheduled for mid-week indicated Fed policymakers felt y needed to act 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 number of coronavirus cases still expected to rise in U.S. and more industries facing a downturn in ir business.

American Airlines said over weekend that it was sharply cutting international flights. Walmart is limiting store hours to ensure y can keep sought-after items such as hand sanitizer in stock, while or retailers such as Urban Outfitters are closing stores altoger. Starbucks will prohibit customers from sitting down for coffee in its stores and will close some locations in large garing places such as malls and campuses.

At same time U.S. and or countries furr restricted travel and took or actions certain to curtail ecomic activity.

U.S. has seen 61 deaths and more than 2,900 infections. In hard-hit Washington state, officials said disease is straining supply of protective gear available to medical providers. Italy, 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.

Besides cutting rates, Fed will buy at least $500 billion of Treasury securities and at least $200 billion of mortg-backed securities. This amounts to an effort to ease market disruptions that have made it harder for banks and large investors to sell Treasuries as well as to keep longer-term rates borrowing rates down.

magnitude of central bank moves indicated to some analysts that Fed Chair Jerome Powell and or members of Fed were worried about health of financial system.

“ Fed’s actions were very bold and it does appear to have spooked markets,” said Nate Thooft, head of global asset allocation at Manulife Investment Manment. “re was an expectation y would do something soon but this is a lot at once and it sends mess y are very worried about growth prospects and credit issues.”