Financial markets plummeted after Trump announced a travel ban from Europe.
The S&P 500 plunged by more than 7% just after markets opened on Thursday, triggering a temporary “circuit-breaker” trading halt for 15 minutes as the massive coronavirus-induced sell-off wages on.
Meanwhile, the Dow Jones Industrial Average opened down by more than 1,690 points, or more than 7%. The Nasdaq fell by more than 7% at the top of Thursday’s trading session.
When trading resumed just before 10 a.m., markets continued to fall.
The sharp sell-off comes after President Donald Trump announced late Wednesday that the U.S. was enacting a ban on certain travel from Europe to the U.S. for the next 30 days and called for a series of stimulus measures to blunt the economic side effects of the virus.
His measures appeared to only heighten investors’ anxiety over the financial impacts of the novel coronavirus outbreak.
“The coronavirus pandemic has taken the stock market into bear market territory and further declines are in the offing as the U.S. effectively hits the ‘Pause’ button on the economy in an effort to curtail spread of the virus,” according to Greg McBride, the chief financial analyst at Bankrate. “Yes, there will be economic disruption and an all-but-certain recession.”
“Markets will undoubtedly overshoot to the downside so it is more important than ever for investors to maintain their long-term perspective,” he added. “Markets will recover sooner, and much faster, than the overall economy and you cannot be sitting on the sidelines when that happens.”
Even before markets opened, futures on the Dow Jones Industrial Average and the S&P 500 were temporarily halted in premarket trading after plummeting more than the “limit-down” of 5%.
On Wednesday, the Dow entered bear market territory for the first time since the 2008 financial crisis.