Dow plunges 3,000 points for biggest one-day drop ever, despite Donald Trump’s and Federal Reserve’s efforts to soothe US coronavirus worries

The Dow Jones Industrial Average on Monday plunged 3,000 points for its biggest one-day point drop ever as US President Donald Trump updated the nation on the coronavirus outbreak spreading throughout America.

The bellwether index of 30 blue-chip stocks plummeted 13 per cent. The Dow began the day by tumbling more than 9 per cent at the open, triggering a 15-minute “circuit breaker” trading halt for the third time in the past week. The temporary halt is designed to prevent a market free fall.

But indices continued to fall sharply after trading resumed, with the S&P 500 stock index and the Nasdaq both sinking 12 per cent.

Markets continued to decline as US President Donald Trump updated reporters on the coronavirus outbreak in the country.

“The market will take care of itself,” Trump said in a press conference after the market closed on Monday. “The market will be very strong as soon as we get rid of the virus.” The president suggested that infections in the US might not be brought under control until July or August.

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Monday’s turmoil followed extreme market swings and volatility last week as the coronavirus outbreak continued to sweep the world, infecting more than 170,000 and killing nearly 6,800 as of Sunday. The global economic outlook has deteriorated as cases surge worldwide outside China where Covid-19 first took hold in December.

As of Monday morning, both the number of infections and death toll outside China had surpassed the figures inside the country.

The Federal Reserve, after an emergency meeting, announced on Sunday night that it would cut the benchmark interest rate by another 1 per cent to between zero and 0.25 per cent. That move followed a rate cut of 0.5 per cent 12 days ago.

The Fed also said it would buy US$700 billion of Treasury bonds and mortgage-backed securities and revive “quantitative easing” – a measure adopted during the 2008 financial crisis to infuse market liquidity.