The government response regarding the Coronavirus outbreak is slowly unfolding to the public and the total package is yet to be announced. This is leading the stock market towards more volatility as the indices show a major drop in futures on Wednesday morning. The DOW futures fell by 821 points and hints at a more than 1000 point drop. Not only this, the futures of other major indexes such as S&P 500 and Nasdaq also hint at a possible drop on the Wednesday.
Based on the futures, the market is about to hit another “limit down” today as it is stated for a drop of more than 5%. The trading is halted in such a situation and the market resumes after a certain time gap. The Coronavirus outbreak has led to such market volatility and investors are only worries about where is this actually taking their money. The huge of amount money that was washed away from the stocks in the past 2 weeks has really hit the economy hard. Now with such a forecasted drop, there is no way to understand whether there will be any major growth in the stock market in the coming days or not.
On Monday, the CBOE index closed at an alarming level. The numbers were higher than the time when the recession came in 2008. This further spooked traders and experts as the market shows no signs of respite for them at least in the coming week. This index is known as the “fear gauge” in the market and hence its growth in the last week has only perpetuated more
fear into Wall Street. On Tuesday, the stocks rebounded to some extent after Trump’s administration offered massive fiscal stimulus. The plans and the amount of money offered have really boosted the market and the results were visible on the indexes. However, now it is disheartening to see that the market is on the verge of another steep drop on Wednesday.