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· Dow plunges more than 700 points despite the Fed cutting rates

Stocks fell sharply in volatile trading on Tuesday as an emergency rate cut by the Federal Reserve failed to assuage concerns of slower economic growth due to the coronavirus outbreak.

The decision to cut rates by half a percentage point came two weeks before the Fed’s scheduled meeting as the central bank felt it was necessary to act quickly to combat the effect of the virus spreading worldwide. It’s the first such emergency action coming in between scheduled meetings since the financial crisis.

The Dow Jones Industrial Average closed 785.91 points lower, or nearly 3%, to 25,917.41; it rose more than 300 points earlier in the day. The 30-stock average gyrated between sharp gains and solid losses after the decision was announced. The S&P 500 fell 2.8% to 3,003.37 while the Nasdaq Composite pulled back 3% to 8,684.09.

· Bank stocks dive after the Fed slashes rates to curb coronavirus impact, JPMorgan off by nearly 4%

Bank stocks sold off in unison on Tuesday following the Federal Reserve’s emergency rate cut to combat an economic slowdown triggered by the fast-spreading coronavirus. The weakness by the group kept the overall markets’ gains in check.

Shares of JPMorgan and Bank of America dropped 3.7% and 5.5%, respectively, while Citigroup and Morgan Stanley fell more than 3%. The declines accelerated after the Fed slashed interest rates by half a percentage point on Tuesday in between its policy meetings, the first such cut since the financial crisis.

Bank margins could take a hit if they are paying out deposit rates at a higher level than market rates. Their earnings are also hurt when the spread between short-term and long-term rates flattens, a phenomenon that could worsen if the Fed cuts.

· Asia stocks little changed as Wall Street tumbles despite Fed rate cut; Australia GDP release ahead

Stocks in Asia were little changed in Wednesday morning trade following a tumble overnight on Wall Street despite the U.S. Federal Reserve announcing an emergency rate cut.

In Japan, the Nikkei 225 was largely flat while the Topix index declined 0.52%. South Korea’s Kospi, on the other hand, gained 0.76%.

Meanwhile, stocks in Australia declined in morning trade, with the S&P/ASX 200 down about 0.9%. Investors await the release of Australia’s GDP for the fourth quarter, expected to be out around 8:30 a.m. HK/SIN on Wednesday.

Overall, the MSCI Asia ex-Japan index was largely flat.

Reference: CNBC, Reuters