JPMorgan’s 5.9% drop reflected in part news that CEO Jamie Dimon had undergone emergency heart surgery as well as plunging bond yields.
The S&P 500 fell for the tenth time in the past 12 sessions.
At 2.37pm the yield on the US 10-year note was 17 basis points lower at 0.72%. It earlier plunged to as low as 0.66%.
Yields on both the 10-year and 30-year securities were poised to record their biggest one-day drops since October 2011 during the depths of the euro zone sovereign debt crisis.
“The collapse in Treasury yields is historic, but this last decline was pretty easy as bond traders drove the 10-year down to match economists’ expectations that the Fed will deliver another 50-basis point cut at the March 18th meeting,” said Edward Moya, senior market strategist, at OANDA in New York.
Futures traders bet the Federal Reserve will slash US interest rates to near zero by April.
Capital Economics’ Andrew Hunter said there’s a chance that the US Federal Reserve will cut its key interest rate range before its March 17-18 policymeeting.
“The 273,000 gain in non-farm payrolls in February, together with the cumulative 87,000 upward revision to gains in the preceding two months, confirms that the US economy started 2020 in very good shape,” Mr Hunter said. “This data clearly precedes the coronavirus impact, however.
“With the 10-year Treasury yield slumping to a new record low and stock markets under pressure again on Friday, it is questionable whether the Fed can wait until its scheduled meeting to deliver the next rate cut,” Mr Hunter also said.
Bank of Montreal is now forecasting a 0.8% contraction in the June quarter in the US, which mark the first quarterly decline since early 2014.
“For now, we are assuming (as a placeholder) that the turning point for the outbreak will occur by May,” BMO senior economist Sal Guatieri said. “If so, real GDP growth could rebound above 2½% on average in the second half of the year.
“We also raised our 2021 growth forecast a couple of tenths to 2.0% in response to the Feds rate cuts (both the 50-point chop this week and another 75 bps expected), as well as some fiscal policy support (such as this weeks bill to allocate $US8.3 billion to contain the spread of the virus, which is likely just a down payment in the fight),” Mr Guatieri also said.
With Reuters