By Yasin Ebrahim
Investing.com – Wall Street selling was stemmed Friday, as Federal Reserve Chairman Jerome Powell hinted at a rate cut after flagging the coronavirus as "evolving risk" to the economy.
The Dow Jones Industrial Average fell 615 points, though had been down more than 1,000 points at the open. The S&P 500 slipped 1.07% and Nasdaq Composite fell 0.22%.
For weeks, Wall Street has been upping bets on a Federal Reserve rate cut, with some pricing in three consecutive cuts starting as soon as March. Powell on Friday, in an unscheduled statement, stoked rate-cut hopes, saying the central bank would act to support the economy after he conceded that the coronavirus was a threat to the economy.
Goldman Sachs said today it estimates the Fed will cut rates by 75 basis points by June, indicating as many as three cuts, with the first cut expected to be delivered at its meeting next month.
The impromptu update from the Fed comes in the wake of a sharp uptick in cases in South Korea, as well as maiden infections reported in New Zealand and Nigeria. The World Health Organization on Friday raised its risk assessment of Covid-19 to a "very high" global level from "high" in late January, but stopped short of declaring a coming pandemic.
But inside of China, however, the pace of infections is slowing and authorities in the country have stepped up efforts to restore operations as factories reopen.
Apple’s factories in China are nearing full production, said Apple (NASDAQ:AAPL) CEO Time Cook, adding that he was “very optimistic” that China was getting a handle on the outbreak.
“It feels to me that China is getting the coronavirus under control. You look at the numbers, they’re coming down day by day by day.” Cook said.
After a brief foray into positive territory, Apple fell nearly 2%, triggering a u-turn in tech, with gains in Nvidia (NASDAQ:NVDA) and Micron (NASDAQ:MU) cut short.
Energy stocks were also on the backfoot, amid a steep selloff in oil prices amid fears of weaker oil demand as the virus outbreak has hurt travel and tourism activity.
Elsewhere, Beyond Meat (NASDAQ:BYND) slumped 17% after the company reported a surprise quarterly loss, which offset better-than-expected revenue.
Wayfair (NYSE:W) fell 13% after its quarterly earnings fell short of Wall Street estimates as costs continue to rise amid a recent ramp-up in hiring.