By Yasin Ebrahim
Investing.com – Wall Street fell sharply Tuesday, with the major indexes down more than 3%, paced by financials amid a plunge in U.S. Treasury yields to record lows on expectations for more Federal Reserve rate cuts and worries over the ongoing coronavirus spread in the U.S.
The sank 2.5%, the lost 2.8% and the fell 2.8%, or 740 points.
A Westchester County man has tested positive for the coronavirus, New York Governor Andrew Cuomo said on Tuesday, bringing the total of confirmed cases in the state to two and to more than 100 in the country overall.
The number of Covid-19 cases in the U.S. increased by 17 over 24 hours, with at least six deaths reported so far and as many as 108 infected, the Centers for Disease Control and Prevention said.
Against the backdrop of rising infections in the U.S., the Federal Reserve delivered a surprise half-a-point rate cut on Tuesday, taking its benchmark rate to 1% to 1.25%.
With the virus impact mainly on the supply side, many have questioned how much the Federal Reserve’s move will support the economy. Still, the move has raised expectations for more cuts in the coming weeks, sending U.S. Treasury yields to record lows.
The fell below 1% for the first time ever, forcing banking stocks even deeper into the red. It set an all-time low of 0.906%.
JPMorgan (NYSE:), Goldman Sachs (NYSE:) and Bank of America (NYSE:) fell sharply, with the latter down more than 5%.
Lower interest rates are typically a headwind for banks, weighing on net interest margin – the difference between the interest income generated by banks and the amount of interest paid out to their lenders.
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