The plan to ease the economic downturn caused by the virus includes lowering interest rates to near zero and implementing a $700 billion quantitative easing program.
"The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook," the committee said in a statement. "In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent."
President Donald Trump praised the decision during a press conference from the White House Sunday afternoon.
"It's really good news," Trump said. "It's something that's really great for our country."
Twenty minutes after S&P 500 Futures opened, they plunged 5%, their "limit down," the most they can decline until markets open on Monday.
Stocks rebounded on Friday, gaining about 9%, but that followed the Dow losing more than 2,350 points, nearly 10%, on Thursday, pushing the index into a bear market for the first time since the 2008 financial crisis. The S&P 500 and Nasdaq also added about 9% on Friday.
"Until we've got answers and we can model out what that means for the economy and corporate earnings, stocks are gonna be volatile," Greg McBride, chief financial analyst at Bankrate, told ABC News on Friday.
ABC News' Ella Torres and Rebecca Jarvis contributed to this report.