US stocks slid today led by energy and mining companies, after both oil and gold prices plunged.

Gold futures for April delivery fell $58.30, the the steepest fall in two years, to $946 an ounce as investors digested yesterday’s smaller-than-expected Fed rate cut, which reduced the appeal of the precious metal as a hedge against inflation.

Oil also dropped — by $5 a barrel. A higher-then-expected US government inventory report today signaled that high oil prices are suppressing demand. Crude oil for April delivery fell 4.3% to $104.75 a barrel in New York trade.

Stocks in US oil majors Exxon Mobil, Chevron and ConocoPhillips tumbled following oil’s sell-off. Top gold producers Barrick Gold and Newmont Mining also slumped on news of gold’s steep decline.

According to Bloomberg:

The Standard & Poor’s 500 Index, which surged the most in five years yesterday after the Federal Reserve cut its benchmark interest rate by 75 basis points, lost 17.39 points, or 1.3 percent, to 1,313.35 at 2:21 p.m. in New York. The Dow Jones Industrial Average dropped 170.56, or 1.4 percent, to 12,222.1. The Nasdaq Composite Index decreased 28.48, or 1.3 percent, to 2,239.78. More than two stocks declined for every one that rose on the New York Stock Exchange.

Why the correction in gold?

“It’s too easy to jump in and say that the gold market is fixed every time gold sells off,” says Dominic Frisby.

“Of course, there’s no doubt the Fed and its allies would not have wanted gold rocketing upwards just as they made their next interest rate cut. A rising gold price tells investors that something is rotten in the state of Denmark (as if Bear Stearns wasn’t evidence enough). So I’m sure the Fed will have been at least pleased to note yesterday’s falls, even if they didn’t cause them. But let’s look at some other possible reasons for the $50 sell-off.

“Perhaps it has more to do with trader and investor psychology. Fear seemed to peak over the weekend – there was that emergency quarter-point cut in the Fed’s lending rate, and gold spiked above $1,020. For all the fiscal irresponsibility of the Fed’s move to lower rates, it has, for the time being, calmed markets – until the next bank goes belly-up. Nevertheless, a calmer market has less need of gold.”