The failure of the European Central Bank to follow the Bank of England and Federal Reserve in slashing interest rates also added to the sharp falls.
Trading on the Dow Jones was suspended by circuit breakers, designed to stop prices in free fall, for the second time this week, having not occurred before that since 1992.
The FTSE 100 has just had its worst day since Black Monday in October 1987, the third worst on record, after this Monday was the fifth worst. The main European markets closed down nearly 12%.
Global stocks plunge as coronavirus fears spread Eurozone bank tries to ease coronavirus crisis
The reality of the economic palpitations that the restrictions on travel, trade and everyday life caused by the pandemic is being felt in stressed corporate debt markets. That’s where big companies raise money that will be paid back with interest.
Image caption The coronavirus is leading to shortages of hygiene items
Debt levels are also higher in the corporate sector than in 2008. That, in and of itself, would have led to a reckoning eventually. The pandemic is now making this correction even more brutal.
Even having said that, some degree of stable leadership in the global response to this global problem might have instilled confidence.
Last night, President Trump provided the opposite of that, seeming to mix together his response to a grave health problem with his long-standing trade problems with the European Union.
Of course, economics is not the main problem right now. It should not be. But the markets are pointing to a wider problematic reality.
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