InvestorQ : Why did the US markets fall so sharply on 03 March despite the Fed cutting the rates by 50 basis points?
sarah Leo made post

Why did the US markets fall so sharply on 03 March despite the Fed cutting the rates by 50 basis points?

Answer
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vidhya Laxmi answered.
6 months ago


This is nothing new and has happened even in the past. The DJIA cracked sharply on Tuesday despite the Fed cutting rates by 50 bps late on Tuesday. Ironically, the Dow had rallied 500 points into the positive after rate cut announcement but dipped more than 1200 points from that level to close with losses of 732 points on Tuesday. The US markets have not seen this kind of sustained sell-off in the markets since 2008. The markets interpreted the 50 bps cut as a desperate move and an affirmation of the fact that the slowdown was much deeper than expected. The 50 bps cut almost looked like a very desperate measure and the fact that the US stocks had rallied by 31% last year only worsened matters.