The global stock markets experienced a dramatic decline on what has been dubbed "Black Monday," driven by fears of a US recession and a disappointing jobs report. Here’s a summary of the situation:
US Markets: The Nasdaq Composite plunged 6.3%, the S&P 500 fell 4.2%, and the Dow Jones dropped 2.7% at the open. Big Tech stocks were hit hard, with Apple falling 4.6% and Nvidia dropping 8.3%.
European Markets: Major indices across Europe fell by about 3% in afternoon trading.
Japanese Markets: Tokyo’s Nikkei index plummeted more than 12%, marking its worst day since the Fukushima crisis in 2011 and its largest-ever points loss.
South Korea: The Kospi index dropped 8.8%.
Bitcoin: The cryptocurrency fell 12%.
Gold: Even gold, traditionally seen as a safe haven, dropped 1.6%.
The market turmoil was triggered by a weak US jobs report that showed the highest unemployment rate since October 2021. This data came shortly after the US Federal Reserve kept interest rates at a 23-year high but hinted at potential rate cuts in September.
The weak job figures and the potential for an emergency rate cut by the Fed contributed to the market's unease. Analysts like Brian Jacobsen suggest that while the Fed might intervene, an emergency rate cut seems unlikely given the current unemployment rate.
Goldman Sachs economist David Mericle noted a slightly increased chance of recession following the jobs report but still considered it relatively low.
The fallout from this uncertainty saw small-cap stocks and tech giants suffer significant losses, impacting market sentiment further.
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