STEVE INSKEEP, HOST:
Good morning. We are here for you on this morning when the stock market has taken another dramatic plunge, at least for now. NPR's chief economics correspondent Scott Horsley is with us. I'm in our studios here in Washington, D.C.; Scott working from home today, practicing a bit of social distancing. Scott, good morning to you.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: Not a good day on the markets. They opened immediately down. What happened?
HORSLEY: That's right. The circuit breaker is supposed to kick in anytime the S&P 500 index falls by 7% to pause trading for 15 minutes and give investors a chance to catch their breath. This morning, the selling was so furious right out of the gate that the S&P actually dipped about 8% before the circuit breaker could even kick in. So then we did have a 15-minute pause. Trading resumed about 20 minutes ago, and stocks have continued their downward slide. As of now, the - looks like the S&P is down about 10%, and the Dow Jones Industrial Average also down about 10% or 2,500 points.
INSKEEP: Yeah. Let's remember, the Dow Jones Industrial is a limited batch of blue-chip companies. That's way down. But the S&P, which is a much broader index - way down. And all of this happened after, we must note - after the Federal Reserve took emergency action on Sunday to lower interest rates almost to zero, which seemed to be something that was designed to reassure the markets.
HORSLEY: It is. But, you know, the Fed is responding to what has become a very abrupt slowdown in large chunks of the U.S. economy. We have seen public health officials at the state, local and federal level adopt increasingly aggressive measures to try to slow the spread of the coronavirus, and those tough but necessary measures are having pretty dire consequences for big chunks of the U.S. economy.
Fed Chairman Jerome Powell acknowledged that yesterday. He said we are almost sure to see a contraction in the economy in the months ahead. And so the Fed is trying to do what it can to cushion the blow, even if its monetary tools may not be exactly what the market needs right - what the economy needs right now.
INSKEEP: Is it possible the Fed scared people by making this sudden action?
HORSLEY: Yes, I think both the magnitude of the action and the fact that it came on a Sunday afternoon kind of fed into some alarm. And the Fed has also said that other parts of government need to do their part. Right now the president is conferring with other G7 leaders, so we may see more action both from Congress and from the administration.
INSKEEP: OK. Now, let's just bear in mind, as we go forward here, that the Dow Jones Industrials could also bounce up 2,000 points, as it did on Friday. We don't want to read too much into the last 40 minutes or so of trading, but it's been pretty brutal. And NPR's Scott Horsley is helping us to keep track of it through the morning. Scott, thanks so much.
HORSLEY: You're welcome.
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