Stocks in the U.S. posted seven consecutive days of losses to end the month of February. The S&P 500® dropped more than 8% for the month, although stocks rallied on March 2 and March 4 to regain some of the lost ground. Equity markets abroad were also impacted, with the MSCI EAFE Index, which tracks developed-economy stocks in Europe, Asia and Australia, dropping more than 9% in February.
As investors unloaded equities, they bought up bonds in a move to safer harbors, driving yields down to record lows. After closing at 1.52% at the end of January, the yield on 10-year U.S. Treasuries ended February at just 1.14% – the lowest yield since the government began issuing 10-year bonds in 1790.
On March 3, the Federal Reserve approved a rate cut of 0.5% to a range between 1% and 1.25%. Although the action was taken to help stabilize the economy and the markets, U.S. stocks moved lower throughout the day, and the yield on 10-year treasuries dipped to a new low of just under 1%.
Oil prices also continued to tumble as global travel slowed dramatically. The price of West Texas Intermediate, a grade of crude oil used as a benchmark in oil pricing, dropped by more than 25% during the first two months of 2020.