Stocks were significantly lower Wednesday, even after Wall Street got what it wanted from the federal government: the serious consideration of a large fiscal stimulus package.
The coronavirus has likely put the U.S. into a recession and with cases only rising and no end in sight, there is very little the Federal Reserve or treasury can do to keep investors’ fear at bay.
All three major indexes in the U.S. fell more than 3%, with the S&P 500 down 3.7% and the tech-heavy Nasdaq falling more than 4%, as tech analysts begin to sour on their companies.
Amidst the pessimism, the treasury market seemed less negative on the developments. The 10 year treasury yield rose to 1.09%, as investors were net sellers of the bond. Bond yields rise when their prices fall. Recently, higher stocks prices accompanied by lower treasury prices has meant investors were raising cash, as treasury prices also haven’t had much upside.
But now, there’s another possibility for the move. "[Stimulus] measures announced in the US attracted capital flows to the greenback,” wrote Ipek Ozkardeskaya, senior analyst at Swissquote Bank. “Massive Treasury spending curtailed the safe-haven appetite in US sovereigns.”
Still, Wall Street — bulls and bears alike — agree that no amount of stimulus can save investors from their fear until the virus is contained. Stocks remain pressured.
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