By Jesse Cohen
Investing.com – Wall Street’s wild rollercoaster week continued on Thursday, as investors weighed whether efforts to contain the coronavirus outbreak will be enough to soften its economic impact.
U.S. stocks pointed to steep falls at the open, following a massive relief rally on Wednesday, as cases of the coronavirus surged in the U.S., leading California to declare a state-wide emergency.
The premarket moves after days of wild swings on Wall Street, which saw the 30-stock swinging 1,000 points or higher twice in the past three days.
Earlier in the week, the Federal Reserve cut interest rates by 50 basis points to a range of 1% to 1.25% in an emergency move on Tuesday, citing the “evolving risks” of the coronavirus to the U.S. economy.
The last time the Fed made a rate cut between scheduled meetings was in October 2008 at the height of the global financial crisis.
The U.S. central bank may not be done lowering interest rates, either. Futures traders are betting on another half percentage point cut being put in place when the Fed meets later this month.
But investors remained fearful that rate cuts alone would not be sufficient to support markets after the Fed acknowledged scale of the challenge and the limits of monetary policy to deal with a public health crisis.
“We do recognize that a rate cut will not reduce the rate of infection, it won’t fix a broken supply chain; we get that,” Fed Chairman Jerome Powell said.
The coronavirus epidemic showed no signs of slowing.
Globally, COVID-19 cases have risen past 95,000, with infections accelerating notably in Italy, Iran and South Korea, and the death toll has been estimated at just under 3,300.
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— Reuters contributed to this report
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