NEW YORK: On Monday, investors focused on signals of a faltering American economy, which caused a wave of concern to sweep through the financial markets, sending stocks down both domestically and internationally.
Following the U.S. jobs data on Friday, which revealed much slower hiring and a rise in unemployment to its highest level in over three years, Monday’s decline continued the sell-off that had started last week. This heightened concerns that the biggest economy in the world would be experiencing a severe slowdown and that the Federal Reserve might have delayed reducing interest rates for too long.
Other concerns that the technology stocks had risen too quickly and that a much stronger yen would harm the prospects of Japanese businesses and certain foreign traders also contributed to the downturn.
U.S. markets: After reversing the worst of its early decline, the S&P 500 sank by roughly 2.3 percent at midday. The heavily weighted Nasdaq composite declined 2.8%.
Tech stocks: Several large technology stocks, whose size gives them influence over the entire market, saw another steep decline on Monday. Apple, Amazon, and Nvidia all had declines of approximately 6%, 4%, and 2%, respectively, as did Meta and Alphabet.
US Federal Reserve rates: In a note, Goldman Sachs stated that it now anticipated a more aggressive rate-cutting schedule from the Fed at its upcoming three meetings, which are in September, November, and December, due to the weakness in the U.S. jobs data. Interest rates have been at a two-decade high for the past year, and this was maintained by Fed policymakers at their meeting last week.
Economic data: On Monday, investors were given some encouraging statistics. Following June’s more depressing figure, the Institute for Supply Management’s report on services showed purchasing managers forecast company rising at 51.4 percent.
Outages: Downdetector reports that 3,600 Fidelity users and over 15,000 Charles Schwab users experienced outages this morning. The trading platform stated in a post on X that hold times might be longer than usual and that certain Charles Schwab clients might experience difficulty logging onto its platforms due to a technical issue.
Global markets: Greater than the decrease experienced during the Black Monday disaster in October 1987, Japan’s Nikkei 225 index saw a 12.4 percent decline, the largest one-day point decline. A “circuit breaker” mechanism, which stops trade to give markets time to process significant movements, was triggered at one point by the decline in Korean and Japanese equities. Every significant market on the continent saw decreases, and the Pan-European Stoxx index dropped 1.5% despite recovering from a significant drop earlier in the day.
