Fears of a US recession were the main culprit behind the global market’s collapse following Friday’s disappointing July jobs report.
Wall Street falls sharply this Monday as part of a global sell-off centered on fears of a U.S. recession. Japan’s Nikkei 225 plunged 12%, marking its worst day since the Black Monday crash in 1987.
The S&P 500 wipes out $2.1 trillion of market cap in the early trading session. This puts the total market cap losses since July 16 at $5 trillion. That’s nearly $357 billion per trading day over the past 14 consecutive trading days.
The Dow Jones Industrial Average fell 1,031 points, or 2.6%. The Nasdaq Composite lost 4%, and the S&P 500 fell 3.2%.
Fears of a US recession were the main culprit behind the global market crash following Friday’s disappointing July jobs report. Investors are also worried that the Federal Reserve is falling behind in cutting interest rates to support an economic slowdown, choosing instead to keep rates at their highest level in two decades last week.
Trading in stocks linked to artificial intelligence is also collapsing. Technology stocks are the worst performers on Monday:
- Nvidia is down more than 7% after the session began, already down more than 23% from its recent high.
- Apple fell nearly 5% after Warren Buffett’s Berkshire Hathaway halved its stake in the iPhone maker.
- Other losers include Tesla, down 10%, and Broadcom and Super Micro Computer, down 7% and 12% respectively.
Other global markets
U.S. Treasury yields are plunging on recession fears as investors flock to bonds as a global safe haven. Bond prices move inversely to yields. The benchmark 10-year bond is yielding 3.7% on Monday.
Heatmap Wall Street.jpeg
There is also talk of the unravelling of the yen carry trade adding fuel to the global market rout after the Bank of Japan raised interest rates last week. The yen is rising in value against the US dollar, ending a practice in which traders borrowed in the cheap currency to buy other global assets.
On Friday, the Nasdaq closed its third straight week of losses, bringing the technology-laden index down more than 10% from a record set last month. The S&P 500 also posted its third straight week of losses, and the Dow Jones Industrial Average, which had been outperforming, snapped a four-week winning streak.
Source: Ambito
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