Wall Street stocks tumbled at the opening bell amid growing fears of an impending US recession.
The tech-heavy Nasdaq Composite plummeted by 6.4%—its worst single-day fall since the pandemic began—intensifying its losses after a 2.4% drop on Friday as panic over a global economic downturn seized the markets.
The Dow Jones Industrial Average fell 2.7%, while the broader S&P 500 sank 4.2%. This followed sharp sell-offs in Europe, where the FTSE 100 dropped 2.8% and Germany’s Dax declined by 3.3%.
Money markets are betting on a 60% chance that the Federal Reserve will announce an emergency quarter-point interest rate cut within a week in response to the global loss of confidence.
The so-called “fear index” on Wall Street has surged to its highest level since the pandemic began four years ago.
Disappointing jobs and manufacturing figures in the US have fueled concerns that the Federal Reserve may have delayed interest rate cuts for too long, risking harm to the world’s largest economy.
Analysts at JP Morgan have warned of a 50% chance of a US recession, while Goldman Sachs estimates a 25% chance within the next year.
Neil Birrell, chief investment officer at Premier Miton Investors, commented, “Clearly, those jobs numbers have freaked everybody out.
“It’s possible that even the Fed believes action is needed to stabilize the markets, potentially through an out-of-cycle rate cut. It would be extraordinary to announce such a move just a week after its policy meeting, especially based on a single data point.”
