Gee, I wonder why. Despite the assured passage of last week’s coronavirus relief bill and a new emergency cut from the Fed, stock futures opened lower this morning — and got worse from there. The trading triggered the “limit down” halt after Dow Jones futures dropped more than 1,000 points:
Stock futures were down sharply on Monday even after the Federal Reserve embarked on a massive monetary stimulus campaign to curb slower economic growth amid the coronavirus outbreak.
Stock market futures hit “limit down” levels of 5% lower, a move made by the CME futures exchange to reduce panic in markets. No prices can trade below that threshold, only at higher prices than that down 5% limit.
Dow Jones Industrial Average futures were off by more than 1,000 points, triggering the limit down level. S&P 500 and Nasdaq 100 futures were also at their downside limits.
This led traders to look at the SPDR S&P 500 ETF Trust (SPY) — which tracks the S&P 500 — for a better indication of how the market will open. The SPY ETF plummeted 10% in the premarket, signaling that a “circuit breaker” will be triggered shortly after the regular session starts. ETFs that track the Dow and Nasdaq 100 — the SPDR Dow Jones Industrial Average ETF Trust (DIA) and Invesco QQQ Trust — were also down more than 8%.
And then it got worse when the markets first opened: