US stocks plummeted on Monday, with the Dow Jones Industrial Average suffering its worst day in nearly two years.
A surge in recession fears ignited by a disappointing jobs report sent shockwaves through global markets.
The Dow plunged 1,033.99 points or 2.6 per cent to close at 38,703.27. The Nasdaq Composite and S&P 500 also tumbled, losing 3.43 per cent and 3 per cent respectively. These marked the steepest daily declines for the Dow and S&P 500 since September 2022.
All US sectors finished in the red, with technology bearing the brunt of the sell-off, down 3.78 per cent.
Investors are increasingly concerned about a US recession after Friday's weak jobs data.
The Federal Reserve's decision to maintain high interest rates, despite growing economic headwinds, has exacerbated these worries.
The sell-off was particularly harsh for megacap tech stocks and the once-hot artificial intelligence sector. Nvidia dropped 6.4 per cent, extending its decline from its 52-week high to nearly 29 per cent. Apple cratered 4.8 per cent following Berkshire Hathaway's significant reduction in its stake. Other losers included Tesla, down 4.2 per cent, and Super Micro Computer, down 2.5 per cent.
Asia was not spared. Japan's Nikkei plunged 12.4 per cent, its worst day since Black Monday in 1987. This marked the largest point loss in the index's history.
Bitcoin tumbled from nearly $62,000 on Friday to around $54,000 on Monday.
Europe’s Stoxx 600 was off by 2.2 per cent.
The Cboe Volatility Index was last at about 38, after climbing as high as 65, its greatest level since the early days of the Covid-19 pandemic in 2020. The so-called VIX index is known as Wall Street’s “fear gauge”, and it’s based on market pricing for options on the S&P 500.
The unwinding of the yen carry trade amplified the market turmoil. After the Bank of Japan raised interest rates, the yen strengthened, forcing investors to unwind positions that had profited from the interest rate differential between Japan and the US.
Futures
The SPI futures are pointing to a 0.36 per cent fall.
Currency
One Australian dollar at 7.20am was buying 64.95 US cents.
Commodities
Gold has lost 1.03 per cent. Silver has lost 4.17 per cent. Copper has lost 2.53 per cent. Oil has lost 0.79 per cent.
Figures around the globe
European markets closed lower yesterday. London’s FTSE fell 2.04 per cent, Frankfurt lost 1.82 per cent, and Paris closed 1.42 per cent lower.
Turning to Asian markets, Tokyo’s Nikkei fell 12.4 per cent, Hong Kong’s Hang Seng lost 1.46 per cent, while China’s Shanghai Composite closed 1.54 per cent lower.
Yesterday, the Australian share market closed 3.7 per cent lower at 7649.56.
Ex-dividends
Amcil (ASX:AMH) is paying 3 cents fully franked.
BKI Investment Company (ASX:BKI) is paying 4 cents fully franked.
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.
Disclaimer
The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
