Stock Market Recovers After Emergency Interest Cut

Earlier today we reported that the stocks of the 100 largest, most traded companies on the London Stock Exchange, FTSE 100, rose with 2.1% after plunging by more than 11% last week. The slump happened due to the coronavirus’ rapid spread in Europe and in the rest of the world last week. The Swedish Stock Exchange also rose when opening this morning, by a staggering 4%.

This afternoon the largest Stock Exchange in the world, the New York Stock Exchange, opened and the surge was impressive. Dow Jones rose 5% and the S&P index rose 4.6%.

The main reason for the surge in the US is reported to be due to recent emergency interest cuts. Today, the US Federal Reserve cut the interest rate by 0.5 percent to the record low of 1.0–1.25 percent, Reuters reports. These measures were taken in an attempt to mitigate the negative economic effects of the coronavirus. After the cut, the US stock exchanges immediately rushed.

The US Federal Reserve’s decision to cut interest rates shows how urgent the bank feels that it must act to prevent a global recession, Reuters concludes.

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Written by

Henric Sundlof

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