NEW YORK >> U.S. stocks fell sharply today after an emergency interest-rate cut by the Federal Reserve failed to reassure markets wracked by worries that a fast-spreading virus will cause a recession.

The Dow Jones Industrial average sank 785 points, or 2.9%. It had surged 5% a day earlier on hopes for a broader set of stimulus measures.

The Federal Reserve surprised the market by cutting its benchmark interest rate by a sizable half-percentage point in an effort to support the economy in the face of the spreading coronavirus.

Chairman Jerome Powell said at a news conference that the virus “will surely weigh on economic activity both here and abroad for some time.”

It was the Fed’s first move since last year, when it reduced its key short-term rate three times. It’s also the first time it’s cut rates between policy meetings since the 2008 financial crisis, and it is the largest rate cut since then.

While the cut gave some investors exactly what they had been asking for, Powell acknowledged that the ultimate solution to the virus challenge will have to come from health experts and others, not central banks.

Some traders are also questioning whether more aid is on the way to stabilize the market, while others called the Fed’s move premature to begin with. For more than a few, the Fed’s steepest rate cut since 2008 recalled the dark days of the financial crisis and only added to the dread.

Through it all, markets are still faced with the same quandary that has sent stock prices tumbling 11% since they set a record just two weeks ago: No one knows how far the virus will ultimately spread before authorities can get it under control, and by how much companies’ profits will fall because of it.

That uncertainty led to jagged trading across markets today. Stocks rallied briefly in the morning following the Fed’s surprise move, but it took just 15 minutes for the gains to evaporate. The yield on the 10-year Treasury fell below 1% for the first time in history as investors ratcheted back expectations for the economy and inflation. A gauge measuring traders’ fear of upcoming swings for stocks jerked wildly up and down through the day.

After popping to a 1.5% gain shortly after the Fed’s announcement, the S&P 500 swung between modest gains and losses for about an hour before turning decisively lower. The index ended the day down 86.86 points, or 2.8%, at 3,003.37. It pared a loss that reached 3.7% in the mid-afternoon, and it marks the eighth drop in the last nine days for the index.

Powell acknowledged that there are limits to the Fed’s influence to deal with the economic repercussions of the virus — from closed factories to canceled business travel to disrupted company supply chains. But he said lower rates can help keep credit flowing, particularly to struggling businesses already laden with debt that would otherwise face higher borrowing costs. And he suggested that the Fed’s intervention would boost consumer and business confidence and provide “a meaningful boost to the economy.”

Many economists do see some benefit from the Fed’s move.

“The Fed obviously cannot address the virus itself by cutting rates, but they can hope to short-circuit the potential for a negative response in financial markets that could make the economic impact of the virus even worse,” said Eric Winograd, senior economist at AB.

Across the world, business is slowing and in some places stopping altogether as a consequence of the virus. Factories in China have been struggling to grind slowly back to life. Many European vacation destinations have been all but deserted as leisure and corporate travel has diminished. And major companies around the world bracing for the risk that the economic landscape could worsen before it improves.

Indeed, Powell noted that “you are hearing concerns from people in the travel business, the hotel business and things like that.”

“We expect that will continue and probably will grow,” he said.

Google told its 8,000 full-time staffers and contractors at its European headquarters in Dublin to work from home Tuesday. Irish news reports have said that a Google staffer is being tested for coronavirus. But the company issued only a brief statement that said it was continuing to take precautionary measures to protect the health and safety of its workforce.

President Donald Trump, who has repeatedly attacked the Fed and Powell in particular for not cutting rates more aggressively, doubled down in a new tweet after the Fed’s announcement, saying, “More easing and cutting!”

Powell said the central bank is focused on its goal of supporting the economy and said, “We’re never going to consider any political considerations whatsoever.”

The Fed has a long history of coming to the market’s rescue with lower rates and other stimulus, which has helped this bull market in U.S. stocks become the longest on record. Some analysts said the Fed’s latest cut could provide some more confidence.

“Confidence in markets is crucial,” said Quincy Krosby, chief market strategist at Prudential Financial. “Without confidence, you don’t have a market.”

The Dow Jones Industrial Average had jumped Monday to its best day in more than a decade on rising anticipation for aid from the Fed and other central banks. Even before today’s announcement, traders were convinced that the Fed would cut rates by half a percentage point on March 18 at its next meeting.

But doubts are high about whether the medicine provided by central banks can be as effective this time around. Lower rates can encourage shoppers and businesses to borrow and spend more, but they can’t reopen factories that have been shut or recall workers out due to quarantines.

After the Fed’s announcement, Powell acknowledged that central banks can’t solve the health crisis. But he said the Fed recognizes the fast spread of the virus is a risk for the economy, and he cited concerns from the travel and hotel industries. Powell said that since last week, when several Fed officials had said they saw no urgent need to cut rates, “we have seen a broader spread of the virus.”

The high stakes pushed the Fed to cut rates outside of a regularly scheduled meeting for the first time since the 2008 financial crisis, when investors were considering a complete meltdown of the world’s financial system as possible if not likely. That in itself may have spooked the market, as some investors wondered if the Fed saw things as worse than they were led to believe.

“I don’t believe that market participants woke up this morning thinking we were facing a crisis similar to the global financial crisis,” said Kristina Hooper, chief global market strategist at Invesco. “But that’s what the Fed’s actions suggested to some.”

She said investors will likely have mixed emotions about the move for days.

Some economists called the Fed’s move premature, given that U.S. economic data has yet to show a sharp drop due to the virus.

“The nature of today’s announcement could send the wrong signal to market participants, including individual investors who are concerned with recent market volatility,” said Roger Aliaga-Diaz, chief economist of the Americas at Vanguard.

Markets are likely to remain shaky until investors get a sense of what the worst-case scenario really is in this virus outbreak. Markets have been on edge for nearly two weeks, as the virus spreads beyond China and companies across continents and industries say they expect it to hit their profits.

Payments processor Visa today joined the lengthening list of companies warning investors. It said its quarterly revenue will be weaker than earlier predicted because of a drop-off in travel-related spending on cards.

“To get a floor on the markets, realistically, what we need to see is not so much a cut in the number of new coronavirus cases, but at least a slowdown in the acceleration,” said Salvatore Bruno, chief investment officer for IndexIQ. “Up until that time, we’re likely to see a lot of volatility.”

Worldwide, more than 92,000 people have been sickened, and over 3,100 have died. The number of countries hit by the virus has reached at least 70, with Ukraine and Morocco reporting their first cases.

The topsy-turvy today got off to a slow trading start in the United States. Earlier in the day, the Group of Seven major industrialized countries pledged support for the global economy, but they stopped short of announcing any specific new measures. Disappointment in the lack of action helped push U.S. stocks lower at the opening of trading, before the Fed surprised markets with its announcement of the steep, half-point rate cut at 10 a.m. Eastern time.

Investors are still speculating whether other central banks will join and cut rates and offer stimulus in a coordinated effort around the world. Before the Fed made its move, the Reserve Bank of Australia cut its key interest rate to a record low 0.5%.

U.S. markets have been hit hard by fear over the virus’ impact. Monday’s surge for stocks on hopes that central banks will come to the rescue followed a broad sell-off last week that erased gains for 2020 and sent indexes into what market watchers call a “correction,” or a fall of 10% or more from a peak. Last week was the worst for the S&P 500 since the financial crisis.

MARKET ROUNDUP:

The S&P 500 fell 86.86 points, or 2.8%, at 3,003.37. The Dow Jones Industrial Average lost 785.91 points, or 2.9%, to 25,917.41, and the Nasdaq fell 268.07, or 3%, to 8,684.09.

European stock markets were broadly higher, with the German DAX returning 1.1%, the French CAC 40 up 1.1% and the FTSE 100 up 1%. In Asia, Japan’s Nikkei 225 fell 1.2%, South Korea’s Kospi rose 0.6%, and stocks in Shanghai added 0.7%.

Bond yields swung following the Fed’s announcement. The yield on the 10-year Treasury slumped to 1.01% from 1.08% late Monday after earlier dropping below the 1% threshold for the first time. The 10-year yield tends to fall when expectations are for weak economic growth and inflation. Shorter-term yields, which move more on Fed actions, had even more dramatic drops. The two-year Treasury yield sank to 0.71% from 0.81%.