Circuit Breaker was triggered for the second time in a week at the New York Stock Exchange (NYSE) as S&P 500 fell 7.02% after the opening bell. Dow Jones and Nasdaq also plunged 9.2% and 8.4%, respectively.
The Cboe Volatility Index (VIX), widely considered the best fear gauge on Wall Street, soared over 66 points to its highest level since 2008.
Dow has entered into bear market since Wednesday after dropping more than 20% from it’s all-time high while S&P 500 only a little bit shy from the territory entering Thursday’s session.
Yesterday, after 1,135 confirmed cases of the virus in the US and 38 deaths, the U.S. President Donald Trump decided to make a strong but necessary restriction on all travelling to Europe for 30 days, excluding the UK. Workers who are ill, caring for others due to the virus or are quarantined will receive financial relief, said Trump in his statement at the White House yesterday. Moreover, in order to support small businesses, Trump will provide $200 billion in additional liquidity while the US Treasury will defer some tax payments.
However, the measures were not strong enough for investors who were in a panic mode and even more panic after the National Basketball Association (NBA) suspended its entire season when one of Utah Jazz’s players tested positive for the virus, implying that the virus is close by.
Just a few hours before the crash in Wall Street, Stoxx 600 also saw its worst one-day drop at 10% while travel and leisure stocks fell 12.8% from Trump’s statement.
To make things even worse, the European Central Bank (ECB) also decided not to cut interest rate, erasing investors’ hopes amid the crisis over the virus outbreak. In addition, the ECB did announce measures to support bank lending, and expanded quantitative easing (QE) program by 120 billion euros.