Market turbulence continued on Tuesday.
Chinese stocks plunged again. The Shanghai Composite Index tumbled 7.6 percent on Tuesday, falling below the 3,000 level for the first time in eight months and extending the decline over the past four days to 22 percent.
In response, China is cutting interest rates. The People's Bank of China announced that it will cut the one-year lending rate by 25 basis points to 4.6 percent effective Wednesday and the one-year deposit rate also by 25 basis points to 1.75 percent. The required reserve ratio will be lowered by 50 basis points.
The move helped boost European stocks. The STOXX Europe 600 jumped 4.2 percent on Tuesday, the biggest gain in four years.
The PBC's move also initially boosted US stocks. The S&P 500 was up 2.9 percent at one point on Tuesday, only for late selling to push the index down 1.4 percent at the close.
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