U.S. Federal Reserve cuts benchmark interest rate by half-point to offset coronavirus impact

U.S. stocks jumped Tuesday after the Federal Reserve made an emergency rate cut to help shield the economy from the impact from the virus outbreak.

The Fed cut short-term rates by half a percentage point, the biggest cut in more than a decade.

The Dow Jones Industrial Average rose 172 points, or 0.6 per cent as of 10:10 a.m. ET. It had been down as much as 356 points shortly before the announcement.

Traders had been keenly awaiting the outcome of a conference call of central bankers and finance ministers from the the Group of Seven, which includes the most powerful developed nations, with some hoping for a wide-ranging package of economic support.

Instead, the group reaffirmed their commitment to use “all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks.”

The Dow surged five per cent Monday in anticipation of moves by the Fed and other central banks to support the global economy following the worst week for stocks since the financial crisis of 2008.

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