Although the world’s largest central banks have lowered interest rates, on Wednesday, stock prices on Wall Street fell significantly, as this move by monetary authorities did not convince investors that the economy would manage to avoid a recession.
The Dow Jones index plummeted by 2.0 percent, to 9,258 points. The S&P index fell by 1.13 percent, to 984 points, while the Nasdaq index lost 0.83 percent, diving to 1,740 points. Over the past six days, the DJIA index has plunged by 1,594 points, marking its largest six-day drop in history, as well as that of the S&P index. In an effort to combat the largest global financial crisis since the 1930s, the central banks of the U.S., Eurozone, Britain, Switzerland, Canada, and Sweden lowered key interest rates by 0.50 percentage points yesterday. Never before has such a broad joint intervention by central banks been recorded. This shows that the fear of recession is currently greater than the fear of inflation, as until recently, monetary authorities were hesitant to lower the cost of money due to concerns about rising inflationary pressures. The interest rate cuts by central banks initially triggered a rise in stock prices on Wall Street yesterday, but a breath of optimism quickly evaporated. In nervous trading, leading indices fluctuated between gains and losses, ultimately falling in the last hour.
