The VIX index soars by almost 200%, its third-biggest rise since the 2008 global financial crisis and the 2020 pandemic. Stock index futures plunge ahead of market open.
The VIX index soars by almost 200%, its third largest rise since the 2008 global financial crisis and the 2020 pandemic.
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He stock market panic unleashed in Japan as a result of the Latest US employment data and the inaction of the Federal Reserve that suggests a possible recession in one of the world’s major economies, caused the fear index to reach its third highest value in history on Monday.
The VIX index soars by almost 200%, its third largest rise since the 2008 global financial crisis and the 2020 pandemic. US stock index futures plunge as fears of a US falls into recession after weak data last week spread across global markets. Stocks from Asia to Europe suffered sharp losses and bond yields fell as investors rushed to buy safe haven assets and bet that the U.S. Federal Reserve would need to cut interest rates quickly to boost growth.
Why the market is afraid of the US economy
All mega-cap and growth stocksthe main drivers of the indices that hit record highs earlier this year, fell sharply in pre-market trading. Apple (AAPL.O) plunges 8.4% after Berkshire Hathaway (BRKN) cut its stake in the iPhone maker by nearly 50%, suggesting the billionaire investor Warren Buffett is increasingly cautious about the US economy in general or stock market valuations that have become too high.
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Reuters
The disappointing employment data also triggered what is known as the “Sahm’s Rule”considered by many to be a historically accurate indicator of recession.
Traders now see a 98.5% chance that the US central bank will cut benchmark rates by 50 basis points in September, compared to an 11% probability seen last weekaccording to CME’s FedWatch tool.
Major Wall Street brokerages also revised their Fed rate projections for 2024 to show further policy easing by the central bank.
Source: Ambito
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