Markets Decline As US Cuts Interest Rates
Continuing with the series of rate cuts, the United States Federal Reserve System, under the leadership of Fed Chair Jerome Powell, has snipped the key interest rates further, by 25 basis points.
This, however, doesn't appear to have incepted the kind of response many observers may have anticipated, as the US Indices closed the day's trade on Wednesday, December 18, on a disastrous note.
All the major indices, including the benchmark Dow Jones industrial average, S&P 500 and Nasdaq Composite, closed with an average deficit of at least 2 per cent.
The US fed after its Federal Open Market Committee, held between December 17 and 18, the central banking system of the largest economy decided to use it's monetary scissors to cut the key interest rates by 25 basis points, bringing the overall interest rates in the range of 4.25 per cent to 4.50 per cent.
When we take a closer look at the major US Indices, the picture of decline is stark.
Dow Jones Industrial Average
The oldest index of them all, the Dow Jones which despite starting higher than it's previous closing, traded with cuts until the announcement of the rate cut, which took the index for a plunge.
By the end of the day, the Dow Jones declined by 2.58 per cent or 1,123.03 points. The overall decline took the index to 42,326.87.
S&P 500
Coming to the S&P 500, the index also dropped by over 2 per cent. In fact, the decline here was even steeper.
The index dropped in value by a massive 2.95 per cent or 178.45 points. The bruised index closed at 5,872.16.
Nasdaq Composite
Furthermore, the story was no different with the tech-heavy Nasdaq, as the index dipped below the milestone 20K mark, at 19,392.69.
The slump here was even bigger, as the benchmark closed with reduction of value amounting to a major 3.56 per cent or 716.37 points.
This crisis at the exchanges appears to have spread like a fiscal pandemic across borders. This is because the key Asian indices including the Nikkei 225 and the Hang Seng index are trading with deep cuts on December 19.
