Fed cuts rates over fear of economic impact of a coronavirus outbreak

A trader passes a hand sanitizing station on the floor of the New York Stock Exchange, Tuesday, March 3, 2020. Federal Reserve Chairman Jerome Powell noted that the coronavirus "poses evolving risks to economic activity." (AP Photo/Richard Drew)

The U.S. Federal Reserve cut its benchmark interest rates by a half-percentage point Tuesday to support the U.S. economy after COVID-19 outbreaks around the globe sent markets plummeting last week.

Fed Chairman Jerome Powell said the virus, "will surely weigh on economic activity bother here and abroad for some time," during a news conference.

It was the first rate cut between policy meetings since the 2008 financial crisis. It was also the largest rate cut in nearly 12 years.

But the news failed to calm markets. Stocks fell sharply after Wall Street opened. While markets rallied briefly after the rate cut, the Dow Jones Industrial Average still plunged more than 785 points at the close of trading.

The Dow, SP 500 and NASDAQ Composite all tumbled around 3%.