California: U.S. stock futures dropped sharply on Monday, driven by global market turmoil centered around fears of a U.S. recession. Japan’s Nikkei 225 experienced its worst day since the 1987 Black Monday crash, plummeting 12 percent.
As of Monday morning, U.S. stock market futures are as follows:
S&P 500 futures: Down 3.2% after a 1.8% loss on Friday.
Nasdaq-100 futures: Down 4.7%, with significant hits to major tech stocks.
Dow Jones Industrial Average futures: Down 858 points, or 2.2%, following a 611-point drop on Friday.
The global market sell-off was primarily triggered by concerns over a potential U.S. recession, exacerbated by a disappointing July jobs report. Investors are also worried that the Federal Reserve has not cut interest rates to counteract the economic slowdown, keeping rates at their highest levels in two decades.
Tech shares were among the hardest hit in early trading, as the once-hot artificial intelligence trade began to unwind:
Nvidia: Down 9% on Monday, already down over 23% from its recent high.
Apple: Dropped more than 8% after Warren Buffett’s Berkshire Hathaway reduced its stake by half.
Tesla: Fell 7%.
Broadcom and Super Micro Computer: Each down more than 9%.
In Asia, Japan's stocks confirmed a bear market, with the Nikkei losing 12.4%, closing at 31,458.42—a loss of 4,451.28 points, the largest in its history.
Other global markets also felt the impact:
U.S. Treasury yields: Fell as investors moved to bonds for safety, with the 10-year note yielding 3.76 percent on Friday, down from 4.20 percent a week earlier.
Bitcoin: Dropped from nearly 62,000 dollars on Friday to around 52,000 dollars on Monday.
Europe’s Stoxx 600: Declined by 2.6 percent in London.
CBOE Volatility Index: Rose above 53, its highest since the early days of the pandemic in 2020.
The unwinding of the yen "carry trade" also contributed to the global market decline, following the Bank of Japan’s decision to raise interest rates last week, which increased the yen’s value against the U.S. dollar.
On Friday, the Nasdaq capped a third consecutive week of losses, down more than 10 percent from its record high last month. The S&P 500 also recorded a third straight losing week, down 2 percent for the week. The Dow Jones Industrial Average, which had been outperforming, ended a four-week win streak, falling 2 percent. The S&P 500 entered Monday’s session down 5.7 percent from its recent all-time high
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