Dow Plunges Nearly 1,900 Points In Two Days As Coronavirus Rattles Global Markets
The Dow dropped 879 points, or 3.1%, while the S&P 500 lost 3% and the Nasdaq Composite lost 2.8%
Topline: After Monday’s 1000-point drop, major stock market losses continued on Tuesday as fears over the spread of the coronavirus intensified and investors fled risky assets in favor of safer ones, like bonds.
- The Dow dropped 879 points, or 3.1%, while the S&P 500 lost 3% and the Nasdaq Composite lost 2.8%.
- 10-year U.S. Treasury yields hit a record low on Tuesday after the yield curve—a measure of the difference between 3-month and 10-year bond yields that is widely used as a recession indicator—inverted on Monday.
- U.S. futures had rallied slightly overnight following Monday’s losses, seemingly pointing to a Tuesday rebound, but stocks largely remained in the red during the day.
- The CDC said on Tuesday that the coronavirus is expected to cause a global pandemic, and the U.S. has now begun its first test of an experimental drug to treat the disease.
- National Economic Council director Larry Kudlow had a more optimistic view, telling CNBC’s Kelly Evans that the coronavirus has been “contained” in the United States and that the outbreak is not likely to be an economic tragedy.
Crucial quote: “The epidemic is likely to be more severe than currently expected, and the disruption to the Chinese economy will have spillover effects on global supply chains — including pharma inputs, of which China is a critical supplier — and business confidence, all of which will likely be more severe than financial markets’ current complacency suggests,” the economist Nouriel Roubini, best known for his analysis of the 2008 financial crisis, wrote in Financial News.
Further reading: Even with these major losses, experts say you shouldn’t panic yet. One silver lining? Investors typically “buy the dip” following big drops.