Stocks fall despite Fed intervention, dragging tech shares down once again

On a day that saw the U.S. Federal Reserve try to flip the only switch it can to light up investor confidence, investors remained unconvinced of the short-term financial prospects of the U.S. and global economies.

All three major indices saw red on Tuesday after a sharp Monday rally partially erased their historically bad week that came before. The see-saw of domestic equities continued for yet another day.

In contrast to yesterday's sharp gains on slim positive news, today's declines came on the back of that surprise Fed rate cut of 50 basis points - the first such unexpected reduction since the 2008 financial crisis.

I'm no expert, but it would appear that the rate cuts aren't having the intended effect.

- Aaron Levie (@levie) March 3, 2020

While it's nice of the Fed to ease some during a period of uncertainty, the fact that it is cutting rates so sharply ahead of the market's timing expectation implies that things could be worse than previously thought.

There are a host of reasons for investor pessimism. Airline travel and the attendant business spending that goes with it is being sharply curtailed by fears of spreading the COVID-19 coronavirus. No one knows the extent to which supply chain disruptions in China in the first quarter will impact supplies in the second quarter. And the U.S. has yet to fully reckon with the coronavirus' spread, nor does it have a good handle on the extent of the virus' spread within the U.S.

A true cause may be unknowable, but the effect was that stocks got whacked. Here's the butcher's bill:

• Dow Jones Industrial Average: -789.37, or 2.96%
• S&P 500: -86.86, or -2.81%
• Nasdaq Composite: -268.08, or -2.99%

The anti-stonking hit tech's largest players as well, with Apple falling over 3%, Microsoft falling 4.8%, Alphabet slipping 3.4%, Amazon falling a more modest 2.3% and Facebook slipping the most with a 5.4% decline during regular hours.

SaaS stocks took things particularly hard, off nearly 4% a few hours before closing, the Bessemer cloud and SaaS index wrapped the day off 2.9%, as well. Some companies didn't take too much damage. Slack lost about a point, and Uber recovered all losses on the day to post a gain.

What could bring about a slowdown to volatility isn't clear.

This recent market turbulence is not stopping some companies from filing to go public - we've seen construction software firm Procore file, along with venture-backed Accolade, just in the last week.