The global financial markets took a massive hit on Monday, as over $1.93 trillion was wiped out from the U.S. stock market alone. The selloff was triggered by growing fears of an impending recession, following last week’s dismal economic data from the United States.
At 11:30 a.m. ET, the Dow Jones Industrial Average plunged 863.70 points, or 2.17%, to 38,873.56. The S&P 500 and Nasdaq Composite also faced significant declines, dropping 2.42% and 2.77%, respectively. Earlier in the day, the Nasdaq had dropped over 1,000 points, leading the rout as tech stocks bore the brunt of the selloff.
Weak jobs data released on Friday exacerbated recession fears. The U.S. economy added just 114,000 jobs in July, falling short of expectations, while the unemployment rate edged up to 4.3%. This news, combined with a dismal global economic outlook, sparked panic among investors, leading to a sharp selloff across global markets.
In Asia, Japan’s Nikkei 225 plunged 12.4%, marking its worst single-day loss since the Black Monday crash of 1987. South Korea’s Kospi index fell by 8.8%, while European markets sank roughly 3%. The ripple effects were felt across various asset classes, with Bitcoin dropping 12% and smaller U.S. companies represented by the Russell 2000 index losing 5.5%.
Big Tech stocks were particularly hard hit. Shares of Alphabet, Netflix, and Meta fell between 2.5% and 4.0%. Nvidia, the AI chip giant, saw its stock plunge over 8% following reports of a delay in launching its upcoming artificial-intelligence chips due to design flaws. Even Apple couldn’t escape the carnage, with its stock declining by 4.6% after Berkshire Hathaway reduced its stake in the company.
The bond market also reacted sharply, with Treasury yields falling as investors sought safe-haven assets. The yield on the 2-year Treasury note dropped to 3.81% from 3.88% late Friday. Meanwhile, commodities like gold and silver weren’t spared either. Gold prices fell over 2%, and silver plunged by 5% as investors liquidated their positions in response to the market turmoil.
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