Global stock markets experienced a significant sell-off on Monday (August 5), triggered by fears of a slowing U.S. economy. The sell-off began last week and has now turned into a worldwide rout. The S&P 500 dropped by more than 4 percent, and the tech-heavy Nasdaq plunged by nearly 6 percent in early trading on Monday. The Dow Jones Industrial Average also tumbled more than 1000 points in early trading, while Japan’s Nikkei average suffered its worst day since 1987, falling more than 12%.
The panic among investors was sparked by a U.S. jobs report released on Friday that showed significantly slower hiring, with unemployment rising to its highest level in nearly three years. This has deepened fears that the world’s largest economy could be sliding into a recession and that the Federal Reserve may have waited too long on cutting interest rates.
“Markets are a little bit out of control,” said Andrew Brenner, head of international fixed income at National Alliance Securities. “This is just total panic. It’s not real, but it is painful, and it could be with us for a few weeks.”
The Federal Reserve voted last week to keep rates at their highest level in more than two decades, where they’ve been for the past year. The central bank signaled a rate cut is possible at its next meeting in September, but pessimists worry that may be too late to stop the slide.
Recent Comments