Meric Greenbaum, Designated Market Maker IMC financial looks up at the board before the opening bell right before trading halted on the New York Stock Exchange on March 9, 2020 in New York. Photo: AFP

US stocks on Monday plunged further, declining after the market opened and triggered a temporary trading halt for the first time in nearly a dozen years, pointing to deepening health concerns of the US economy brought about by the coronavirus (COVID-19) outbreak.

The ominous signs that have emerged in the US economy in recent weeks have placed greater pressure on US officials, whose hands are tied when responding to the economic fallout caused by COVID-19 following an emergency rate cut, to suspend the trade war, Chinese analysts noted.

Minutes after the market opened, the US S4P 500 Index plummeted 7 percent to 2,764.21, triggering the circuit breaker for the first time since December 2008. Markets continued to point lower after trading resumed following a 15-minute calm period.

"This means that the US economy is facing a major crisis. The US economy could go through a temporary shock," a veteran financial analyst who follows global markets closely told the Global Times on Monday, noting that steep losses on Wall Street could push the US Federal Reserve to slash interest rates and quantitative easing.

US President Donald Trump was reportedly scheduled to hold a meeting Monday afternoon to discuss a possible response measures, although analysts have questioned the effectiveness of additional interest rate cuts, which is approaching the zero mark, and the broad economy impacted by COVID-19. 

Last week, the Fed lowered interest rates by 50 basis points after the US stock market fell amid fears of COVID-19 spreading across the country. 

In a tweet Monday morning, Trump apparently sought to blame the losses on an  earlier argument between Russia and Saudi Arabia over oil prices, and media hype surrounding COVID-19. 

Prior to Monday's market opening, global crude oil prices plummeted 34 percent, the worst loss since the Gulf War in 1991, after Saudi Arabia reportedly said it would launch a price war with Russia. 

Since COVID-19 has spread to over 90 countries worldwide, including 34 US states, it has triggered stock sell-offs and sounded alarms for deeper trouble for the US economy, including staggering government and household debt, to manufacture sector slow-downs..

Total household debt reached a record high of $14.15 trillion in 2019, equivalent to 67 percent of the US GDP, according to the Fed. 

About 40 percent of US families said they were having trouble covering daily expenses prior to COVID-19 outbreak, according to the Washington Post. 

In February, the Institute for Supply Management reported that the manufacturing purchasing manager's index fell to 50.1 percent, close to the 50 percent threshold of divide expansion and contraction.

Pressure to end tariffs 

The ominous signals for the US economy are also likely to intensify pressure on Washington to consider suspending the trade war with China to help businesses cope with the economic fallout, analysts said.

"The Trump administration is under pressure to come up with a plan to save the economy, as the presidential election is heating up," Mei Xinyu, a research fellow at the Ministry of Commerce's Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday, noting that the chances of the US suspending tariffs on Chinese products is increasing daily amid mounting pressure.

US lawmakers recently raised the prospect of suspending or cutting US tariffs on China to help the economy. 

US Senate Finance Committee Chairman Chuck Grassley said last week that tariff cuts would stimulate the economy, and suggested that they would be easier to carry out than tax cuts through the US Congress, according to Reuters.

A financial market analyst, who spoke on the condition anonymity, also said that the US "might to an appropriate extent abandon its tariff stick and work with China to save the economy."

However, Mei said it might be too premature for "some US bullies" to realize the severity of the economic trouble and move to cut tariffs on Chinese products. 

"Like what I have always said, some would not shed a tear until they see the coffin… right now, the pressure is not big enough for them to remove the tariffs but the pressure is building," Mei explained.