US markets down 1% as wary investors hoard cash

By Ovunc Kutlu

ANKARA (AA) - US stocks were down more than 1% Wednesday as investors hoard cash amid the uncertainty of rising coronavirus cases and ahead of a decision by the Federal Reserve.

The Dow Jones plummeted 416 points, or 1.35%, to 30,520 at 10.15 a.m. EDT (1515GMT), while the S&P 500 was down 50, or 1.32%, to 3,798.

The Nasdaq slumped 139 points, 1.02%, to 13,486 as Netflix, Pfizer and oil majors ExxonMobil and Chevron each shaved more than 2%.

VIX volatility index, also known as the fear index, soared 26% at one point to as high as 29.06 as investors worry that new variants of the virus would prolong global economic recovery, as they take profits and start piling cash.

Precious metals seen as safe bets, such as gold and silver, were down while Bitcoin-led cryptocurrencies extended their losses to more than 5%.

As investors turned to cash, the dollar index jumped to $90.88 -- its highest level since Dec. 14.

The Federal Reserve will conclude a two-day meeting at 2 p.m. EDT (1900GMT), where it is not expected to change the federal funds rate.

The central bank may indicate extending its purchase program's duration or scope to keep buying bonds and assets from the market until the US economy gets back on track and full employment is restored.