Dow closes down almost 800 points as reality of coronavirus epidemic sinks in

Nervous traders loaded up all day on "safe haven" assets such as gold and Treasury notes — pushing yields to record levels.

Traders work on the floor at the New York Stock Exchange on Tuesday, March 3, 2020.Brendan McDermid / Reuters
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The Federal Reserve's historic emergency rate cut was not enough to assuage Wall Street on Tuesday, with the Dow Jones Industrial Average plunging wildly to end the day down by almost 800 points.

Nervous traders loaded up all day on "safe haven" assets such as gold and Treasury notes — pushing yields to record levels — amid growing realization that the coronavirus might not be as fleeting as President Donald Trump's administration has conveyed.

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The cut is intended to "boost household and business confidence," mirroring actions taken by central banks around the world, Fed Chairman Jerome Powell said at a news conference after the surprise announcement.

However, it spooked investors, pushing all three major averages down after he spoke. By midafternoon, the S&P 500 had fallen by 3.4 percent, and the Nasdaq was down 3.6 percent.

"It's great that the Federal Reserve recognizes that there's going to be weakness, but it makes me feel, wow, the weakness must be much more than I thought," CNBC's Jim Cramer said. "I'm now nervous. I'm more nervous than I was before."

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Traders parsed an ever-growing list of major event cancellations, from the World Bank's choosing a "virtual format" for its huge annual meeting in Washington, D.C., to Facebook's pulling out of the South by Southwest event in Austin, Texas.

Tuesday's market action came just one day after a historic rally in which the Dow gained the most points ever, spiking by 1,294 points at the closing bell Monday.