Another 1,000-point drop in Thursday’s trading session has Wall Street on edge and after a surprise 50-basis point rate cut, investors are looking for more. Coronavirus fears continue to persist, but the central bank isn’t replete with a staff of medical professionals so what’s the Fed to do?

“The Fed’s stimulus doesn’t fix broken supply chains or persuade people who are worried about being exposed to the virus to leave their homes and spend,” said Nathan Sheets, chief economist at PGIM Fixed Income. “But it should provide a safety net of sorts by helping ensure that financial conditions remain supportive, lifting sentiment more generally, and helping to ensure that there is ample liquidity in the system.”

“Bottom line is that the Fed’s action is helpful, but it’s not a panacea,” he added.

Per a CNBC report, U.S. lawmakers were quick to respond by when they “tentatively agreed to the emergency funding package to address the spread of the deadly coronavirus as the Centers for Disease Control and Prevention reported that 129 cases had been identified in the United States. The congressional spending proposal is more than three times the $2.5 billion President Donald Trump proposed last week.”

Throwing money at coronavirus concerns can help ease the minds of the capital markets, but it still remains to be seen whether this will be enough.

“If this spending meets its objectives of protecting the public and limiting the spread of the virus, it could yield economic (and humanitarian) returns literally hundreds of times over,” Sheets said. “The Fed’s move is helpful and supportive. But spending the resources necessary to fight the virus and protect the public is absolutely critical.”

In the meantime, Wall Street is expecting more rate cuts from the central bank—given that, the question now is: how low can rates go?

“There’s this growing narrative that the Fed expected the 50 bps cut to shock equities higher. This couldn’t be further from the truth,” wrote Thomas Tzitzouris, head of fixed-income research at Strategas Research Partners.

“The Fed, under Powell, has been very clear that the only market that matters to them is the bond market, and they will do anything to keep inflation near target, including unexpected moves,” Tzitzouris added. “The Powell Fed has been open that it wants to keep the 2s/10s spread from inverting because they view this as a hindrance to monetary policy transmission.”

Rate Cuts Pose A Golden Opportunity

More rate cuts ahead will certainly give gold investors something to cheer about as the precious metal is eyeing the $1,700 per ounce price mark. Investors looking to get gold exposure can look at funds like SPDR Gold Shares (NYSEArca: GLD)and the SPDR Gold MiniShares (NYSEArca: GLDM). Precious metals like gold offer investors an alternative to diversify their holdings, and like other commodities, gold will march to the beat of its own drum compared to the broader market.

Gold Price in US Dollars Chart

Gold Price in US Dollars data by YCharts

For more market trends, visit ETF Trends.