The S&P 500 and the Nasdaq indexes lost about 2.6% each as funds scrambled to sell their positions in stock market darlings such as the FAANGs to make up for surging losses from bets made against struggling smaller companies.
It all spoiled any parties lined up to celebrate bumper results from Microsoft and Facebook; caught up in the broader slump, shares in the two mega-caps stars posted only modest gains. And Apple, despite beating expectations, saw shares retreat in after-hours trade.
Tesla, with a 670% share price surge over the past year, disappointed Wall Street meanwhile, with lacklustre Q4 profits and lack of a target for 2021 deliveries.
Anyway, the New York spillover dragged down Asian bourses on and European futures are 1% lower; a weaker session could mean the pan-European STOXX 600 index kisses goodbye to remaining 2021 gains.
The Fed meeting was, not entirely unexpectedly, a sideshow; it pledged in short to keep policy support intact until a full economic rebound was in place.
But its downbeat assessment of the economy added to fears for the recovery. Indeed, data later in the day is expected to show the U.S. economy contracted at its sharpest pace since World War Two in 2020.
Ten-year U.S. Treasury yields falling below 1% for the first time in three weeks is probaly all that one needs to know about today’s risk-off mood.