The S&P 500 wiped out about $1.737 trillion of its value during its two-day market sell-off. The S&P 500′s two-day loss of 6.3% was the largest for the benchmark since August 2015, when the Chinese government devalued the yuan amid the U.S.-China trade war.
Investors fled riskier assets amid intense fears about a slowdown in global growth caused by the deadly coronavirus. The spreading deadly virus, that has infected more than 80,000 and killed more than 2,700, has sent shock waves through the markets. Companies like Apple, Nike, United Airlines and Mastercard have all raised flags about the coronavirus and its impact on their earnings.
Health officials at the Centers for Disease Control said on Tuesday that the coronavirus is likely to continue to spread throughout the United States and the American public should prepare for the expectation that this is going to be bad. This follows news on Monday about a spike in cases in other countries in Asia, the Middle East and Europe, outside the virus's epicenter in China. Investors are closely watching reports in Italy, Iran and South Korea.
Some investors had been betting that central banks like the U.S. Federal Reserve would counter any economic weakness resulting from the virus with support such as interest rate cuts. But worries about supply chain disruption curbed this confidence.
In a speech at a conference on Tuesday, Federal Reserve Vice Chairman Richard Clarida said that the central bank is closely monitoring the Coronavirus's spread and its economic impact, adding that it is too early to speculate about its effects in detail. He added that the Fed will respond if anything triggers a material reassessment to the US economic outlook.
Department store operator Macy's Inc fell 4% despite reporting a smaller-than-expected drop in quarterly same-store sales.
Mastercard Inc shares fell 4.7% after announcing Chief Executive Ajay Banga would step down at the start of the next year and be replaced by products head Michael Miebach.
HP Inc surged 6%, providing the biggest boost to the S&P, after saying it would step up efforts to slash costs and buy back stock, as it sought investor support to defend against a $35 billion takeover offer from US printer maker Xerox Holdings Corp.
The safe-haven US Treasury bonds again attracted buyers and the 10-year bond yield dropped to a new all-time low below 1.32%.
US and global oil benchmarks fell further on the expectation of lower demand for energy in a coronavirus-inspired economic downturn. US oil futures settled nearly 3% lower at $49.90 a barrel, while the global oil benchmark dropped 2.4% to $54.95 a barrel.
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