Stock futures point to a rough open
U.S. stock futures were sharply lower on Monday, despite the Federal Reserve’s decision to cut its key interest rate to near zero and plans to buy $700 billion in Treasury and mortgage-backed securities in an attempt to add stability to the economy amid the deepening global coronavirus pandemic.
As of 5:20 a.m. ET, the blue-chip Dow futures plunged 1045 points, or 4.58% to 21,794. The S&P 500 futures plummeted by 128.62 points, or 4.79% to 2,555.38 while the tech-heavy Nasdaq 100 futures lost 360.25 points, or 4.56% to 7,540.50.
In commodities, U.S. West Texas Intermediate crude futures were down $1.60, or around 4.98%, at $30.51 per barrel. International Brent crude oil futures were at $31.45 a barrel, down $2.40, or about 7.09%.
In a statement announcing the decision on Sunday, the central bank said it was cutting rates by to a target range of 0% to 0.25%. The central bank also said it will keep rates at nearly zero until it feels confident the economy has weathered recent events.
“The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook,” the central bank said. In light of these developments, the [Federal Open Market] Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent.”
“The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” the Fed added.
At a news conference on Sunday afternoon, President Donald Trump congratulated the central bank and said its decision to cut interest rates “make me very happy.”
However, more businesses are warning of rough times ahead as the financial impact of the novel coronavirus pandemic spreads through the economy. At least 150 publicly traded companies have warned investors their finances will take a hit because of the pandemic, with several anticipating they will miss target for the current quarter.
Global coronavirus death toll tops 6,500
The worldwide death toll from the Covid-19 pandemic rose past 6,500 on Monday with the total number of cases rising to more than 169,000 as the infection continues to force countries to take aggressive measures to prevent a global health crisis.
According to data compiled by John Hopkins University, there are now 3,774 confirmed cases and 69 deaths in the United States. The Centers for Disease Control and Prevention (CDC) on Sunday issued further guidance, recommending against group gatherings or events of 50 or more people for at least the next eight weeks.
Trump adds UK and Ireland to coronavirus travel ban
Meanwhile, the Trump administration has included the United kingdom and the Republic of Ireland to its European coronavirus travel ban due to a surge in cases there.
Both countries were initially excluded from travel restrictions announced by the administration. However, Vice President Mike Pence said on Saturday that foreign nationals from the UK and Ireland would not be allowed into the US starting midnight Monday night, EDT.
“Americans in the UK or Ireland can come home. Legal residents can come home,” Vice President Mike Pence said in a news conference at the White House.
The White House is also weighing limits on domestic travel. Speaking to reporters at the White House on Saturday, President Donald Trump said: “We’re working with the states, and we’re considering other restrictions.”
