Global Market Sell-Off: Dow Drops 1,000 Points Amid Recession Fears

Stocks faced a severe downturn on Monday. The Dow Jones Industrial Average lost over 1,000 points, a decline of nearly 3%. The S&P 500 and Nasdaq Composite also fell, by 3% and 3.43% respectively, marking their steepest drops since September 2022.

The sell-off was triggered by fears of a U.S. recession, compounded by a disappointing July jobs report. Investors are concerned that the Federal Reserve is too slow to reduce interest rates, which remain at their highest levels in two decades.

Technology stocks were particularly hard hit. Nvidia fell 6.4%, and Apple dropped 4.8%. Berkshire Hathaway reduced its stake in Apple by half. Tesla and Super Micro Computer also saw declines.

Japan's Nikkei 225 experienced its worst day since the 1987 Black Monday, falling 12.4%. Global markets were shaken. U.S. Treasury yields dropped as investors sought safer investments. Bitcoin fell from $62,000 to $54,000.

The VIX, a measure of market volatility often referred to as Wall Street's fear gauge, surged to 65, its highest level since the early 2020 Covid panic.

Sam Stovall of CFRA Research noted that the market was vulnerable and a correction was inevitable. The S&P 500 is now 8.5% below its recent peak.

Austan Goolsbee of the Chicago Fed suggested that interest rates might be too restrictive, and the Fed will adjust if the economy deteriorates.

Only 22 stocks in the S&P 500 ended the day higher. Major indexes recorded their worst three-day losses since 2022.

U.S. crude oil prices hit a six-month low, and OPEC's plans to increase production are now in question. Solar ETFs also suffered, falling to a four-year low.