Asian stock markets, US futures sink after Fed's rate cut Asian stock markets and U.S. futures have fallen after the Federal Reserve slashed interest rates to shore up economic growth as more governments imposed anti-virus controls that are shutting down business and travel

BEIJING -- Asian stock markets and U.S. futures fell Monday after the Federal Reserve slashed its key interest rate to shore up economic growth in the face of mounting global anti-virus controls that are shutting down business and travel.

Sydney's benchmark plunged 7% and Hong Kong's Hang Seng lost 2%. Shanghai was down 0.5% and Tokyo was flat. Brent crude, the international oil standard, fell 3% while gold gained.

On Wall Street, futures for the benchmark S&P 500 index fell 5% on Sunday night and triggered a halt in trading.

The Fed cut its key rate by a full percentage point — to a range between zero and 0.25% — and said it would stay there until it feels confident the economy can survive a near-shutdown of activity in the United States.

“Despite whipping out the big guns," the Fed's action is "falling short of being the decisive backstop for markets,” said Vishnu Varathan of Mizuho Bank in a report. “Markets might have perceived the Fed's response as panic, feeding into its own fears.”

Japan's central bank was holding a policy meeting, convened several days earlier than planned. Bank of Japan Gov. Haruhiko Kuroda has pledged to do whatever is needed to help buttress slumping economic growth after the economy contracted at a 7.1% annual rate in the last quarter, before the impact of the virus outbreak had even been felt.

Western governments have shut public facilities and imposed travel curbs, raising the cost of efforts to contain the outbreak that has infected nearly 170,000 people worldwide. China, where the coronavirus emerged in December, accounts for about half of those, but a dozen other countries have more than 1,000 cases each.

Spain followed Italy's lead in imposing nationwide curbs will allow its 46 million people to leave home only to go to work, to buy food and medicine or on errands to care for the young and elderly. In the Philippines, soldiers and police sealed off the crowded capital, Manila, from most domestic travelers.

New York City announced it will shut down the largest U.S. public school system as early as Tuesday, sending more than 1.1 million children home. Governors in California, Illinois and Ohio told all bars and restaurants to close or reduce their number of customers.

In Sydney, the S&P-ASX 200 fell to 5,468.8. The he Shanghai Composite Index retreated to 2,873.07 and Hong Kong's Hang Seng tumbled to 23,597.15.

In Tokyo, the Nikkei 225 was little-changed at 17,726.98.

The Kospi in Seoul declined 0.2% to 1,767.55 and Sydney's S&P-ASX 200 lost 5.3% to 5,246.10.

Brent crude lost $1.01 to $32.84 per barrel in London. Benchmark U.S. crude tumbled 1.8%, or 56 cents, to $31.17 per barrel in electronic trading on the New York Mercantile Exchange.

That followed a dizzying week in which the Dow Jones Industrial Average twice fell by more than 2,000 points and also record its biggest point gain ever — 1,985 points on Friday. The bull market that began in 2009 in the depths of the financial crisis came to an end. Europe markets saw similar volatility.

JPMorgan Chase now is forecasting the U.S. economy will shrink at a 2% annual rate in the current quarter and 3% in the April-June quarter.

The Fed's decision to act before a meeting scheduled for mid-week indicated its policymakers felt they needed to move immediately to shore up investor confidence. Most market watchers expected more volatility ahead because the number of U.S. virus cases is rising and more industries face a downturn.

United Airlines said it needs to cut flying capacity by 50% in April and May and expects the cuts to extend into the summer travel season. American Airlines said it cutting international flying 75%.

Walmart is limiting hours to ensure stores can keep sought-after items such as hand sanitizer in stock. Late Friday, Apple said it was closing all retail stores outside of China.

Besides cutting rates, the Fed will buy at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. This amounts to an effort to ease market disruptions that have made it harder for banks and large investors to sell Treasuries as well as to keep longer-term rates borrowing rates down.

The magnitude of the central bank moves indicated to some analysts that Chair Jerome Powell and other members of the Fed were worried about the health of the financial system. But others noted the Fed was just reacting to signs the situation in Europe and the U.S. was only getting worse.

“The Fed’s actions were very bold and it does appear to have spooked the markets,” said Nate Thooft, head of global asset allocation at Manulife Investment Management.

“Markets were going to be spooked anyway due to the scale of the shutdowns across the U.S. and sobering implications of a $20 trillion dollar economy that is about to grind down to a crawl,” said Yung-yu Ma, chief investment strategist at BMO Wealth Management.

“Also, developments in Europe are raising the prospect that what was just a week ago considered ‘worst case’ might be closer to ‘base case’ for the U.S.,” Ma said. “Big picture, the Fed’s actions are all positive.”