The US stock market has no idea how to react to the Fed’s emergency rate cut


Stocks fluctuated wildly on today after the Federal Reserve slashed interest rates by a half point to help protect the US economy against the fallout from coronavirus.

The surprise move by the Fed followed a wild rally at the start of the week in which the Dow recorded its highest point-gain in history.

But stocks were up and down early today. The Dow was up points as many as 381 points and down as many as 356 points in a roller coaster open.

Stocks initially jumped higher after the Fed cut rates, but then they moved lower:

  • The Dow was most recently down 100 points. 
  • The broader S&P 500 was down 0.1% after logging its best day in more than two years Monday.
  • The Nasdaq Composite was down 0.1%.

Investors balanced the jolt the US economy could get from the Fed’s stimulus with the message the stunning rate cut sends: The US economy could be in trouble because of coronavirus.


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