New York, August 2, 2024 – In a shocking turn of events, global stock markets have plunged, with over $2.9 trillion wiped out from major indices and stocks in a single trading session. This staggering loss marks the worst day for stocks since March 16, 2020, when the COVID-19 pandemic sent shockwaves through the financial world.
The sell-off began in Asia, with Japan’s Nikkei 225 index slumping 5.8%, its worst performance in more than four years. The carnage quickly spread to Europe, where markets dropped approximately 1.6% on Friday morning.
On Wall Street, the carnage was even more severe. The Dow Jones Industrial Average shed more than 900 points, or 2.3%, while the S&P 500 and Nasdaq Composite slid over 2%. Tech shares led the declines, with Intel falling over 25% and Amazon tumbling 11.9% after disappointing earnings results.
The sell-off was triggered by a combination of factors, including weaker-than-expected U.S. jobs data, disappointing manufacturing numbers, and growing fears that the Federal Reserve has kept interest rates too high for too long.
Initial jobless claims in the U.S. surged to around 249,000 last week, the highest number since August 2023, while ongoing claims climbed to 1.877 million, the highest figure since November 2021. The ISM index, which measures factory performance, fell short of expectations, indicating potential economic contraction.
Cedric Chehab, the global head of country risk at BMI, warned that while corrections are normal, especially after substantial rallies, equities “appear vulnerable to further declines, suggesting that it may be too soon to buy the dip.”
Investors are now closely watching the upcoming nonfarm payrolls report, hoping for insights into the pace and magnitude of potential Fed rate cuts in the coming months.
As the trading day progresses, market participants brace for further volatility and uncertainty, with the specter of a global recession looming large over the financial landscape.
