The Bank of Canada cut its key rate by one-quarter of a percentage point Tuesday, shortly after the U.S. Federal Reserve cut a key interest rate by three-quarters of a percentage point.  The cuts came as global stock markets continued to fall for a second day.

The Bank of Canada lowered its target for the overnight rate to 4 per cent.

The U.S. federal funds rate, the interest that banks charge each other on overnight loans, has been cut to 3.5 per cent -- down three-fourths of a percentage point from 4.25 per cent.

The action marks the most dramatic signal the Fed can send to show its concern about the potential for a recession in the U.S.