As the Dow drops 1,000 points amid the global market rout, recession fears heighten due to many brokers reporting errors.
Videos by Suggest
According to ABC News, the major stock indexes in the U.S. fell more than 2% in early trading, with the S&P 500 falling about 4%. Nasdaq dropped more than 6% while the Dow fell roughly 1,000 points, or nearly 3%.
The media outlet reported that the market downturn also triggered calls for a larger interest rate cut at the Federal Reserve. Its next meeting will take place in September. However, some investors are calling for a rare emergency rate cut as soon as this week.
Along with the Dow and the recession fears in the U.S., other countries are being hit with economic market downturns as well. Japan’s main Nikkei 225 stock index dropped more than 12%.
Monday was dubbed its worst day of trading since “Black Monday” of 1987 hit Wall Street. The pan-European STOXX 600 index also dropped 2.2% at 486.79 points, its lowest since Feb. 13.
As the U.S. markets plunge, various companies are seeing a significant dip. Chipmaker Nvidia took a significant dip of more than 14% while Apple fell more than 8%.
Dan Ives, a managing director of equity research at investment firm Wedbush, released a note to clients addressing the situation. “Investors are feeling massive pain globally,” Ives pointed out. He also said U.S. markets are “trading heavy in the red across the board.”
U.S. Bureau of Labor Statistic Data Revealed Hiring Numbers Fell Short Just Before Dow Plunge
Meanwhile, the U.S. Bureau of Labor Statistics released July data days before the Dow plunge, revealing the numbers of employment failed to meet economist expectations.
According to the data, employers hired 114,000 workers during the month of July. This fell short of the economist expectation of 185,000 jobs added. The unemployment rate climbed to 4.3%, the highest level since October 2021. The unemployment rate was at 3.7% one year ago.
Just before the Dow and other markets experienced the dips, Goldman Sachs economists raised the probability of the U.S. hitting a recession in 2025 from 15% to 25%.
Sam Stovall, CFRA Research chief investment strategist, released an observation about the situation. “The market was whistling past the graveyard. I think people were basically lulled into a sense of security, yet the market itself was very vulnerable to to a correction — and the weaker than expected economic and employment data provided that catalyst for correction.”