Dow futures tumble 1200 points as global stock market rout ...
A trader works on the floor of the New York Stock Exchange.
Spencer Platt | Getty Images
U.S. stocks fell sharply on Monday as part of a global market sell-off centered around U.S. recession fears. Japan's Nikkei 225 plunged 12% in its worst day since the 1987 Black Monday crash for Wall Street.
Fears of a U.S. recession were the main culprit for the global market meltdown after Friday's disappointing July jobs report. Investors are also concerned that the Federal Reserve is behind in cutting interest rates to bolster an economic slowdown, with the central bank choosing instead to keep rates at the highest in two decades last week.
Dow Jones futures, 1-day
There's also an unwinding of the once-hot artificial intelligence trade going on. Tech shares were among the worst performers in early trading Monday:
Nvidia tumbled 9% Monday after going into the session already down more than 23% from its recent high.Apple cratered more than 8% after Warren Buffett's Berkshire Hathaway cut its stake in the iPhone-maker in half.Other losers included Tesla, down 7%, and Broadcom and Super Micro Computer down more than 9% apiece.In Asia overnight, Japan stocks confirmed a bear market as Asia-Pacific investors had their first chance to react to the sour jobs figures in the U.S. from Friday. The 12.4% loss on the Nikkei — which closed at 31,458.42 — was the worst day for the index since the "Black Monday" of 1987 hit Wall Street. The loss of 4,451.28 points on the index was also the largest in terms of points in its entire history. The Dow lost more than 22% in a single day on Black Monday.
Other global markets were also severely impacted:
U.S. Treasury yields tumbled on the recession fears and as investors flooded into bonds for a global safe haven. Bond prices move inversely to yields. The benchmark 10-year note on Friday yielded 3.76%, down from where it was one week previously at 4.20% and the lowest in a year.Bitcoin tumbled from nearly $62,000 Friday to around $52,000 on Monday.Europe's Stoxx 600 was off by 2.6% in London.The CBOE Volatility Index shot higher to above 53, its highest since the early days of the pandemic in 2020.There is also chatter about the unwind of yen "carry trade" adding fuel to the global market decline after the Bank of Japan raised interest rates last week. The yen is rising in value vs. the U.S. dollar, ending a practice of traders borrowing in the cheap currency to buy other global assets.
"It's painful," said Victoria Greene, chief investment officer at G Squared Private Wealth on CNBC's "Worldwide Exchange." "I think there's a lot being absorbed that happened over the weekend between Berkshire cutting Apple...you had the Japan sell-off... you have the yen spike and the end of that carry trade...You have a lot of bad news getting priced in."
"This is a pullback, a correction," she added. "We'll probably hit oversold at some point...rather quickly at these levels."
On Friday, the Nasdaq capped a third straight week of losses, bringing the tech-heavy index down more than 10% from a record set last month. The S&P 500 also posted a third straight losing week, down 2% for the week. Even the Dow Jones Industrial Average, which had been outperforming, snapped a four-week win streak, falling 2%. The S&P 500 went into Monday's session down 5.7% from its recent all-time high.
Chicago Fed President Austan Goolsbee, while avoiding commitment to a specific course of action, indicated that interest rates at their current level may be too "restrictive" on CNBC's "Squawk Box" on Monday.
If economic conditions meaningfully deteriorate, the central bank will "fix it," Goolsbee added.
Economic data due out Monday include the July ISM Services PMI, a measure of the performance of U.S. services companies that's set to show a rise to 50.9, up from 48.8 previously.
Traders monitor offers in the S&P options pit at the Cboe Global Markets exchange in Chicago, Illinois.
Scott Olson | Getty Images News | Getty Images
The Cboe Volatility Index, or VIX, rose to 65 on Monday morning after trading near 23 on Friday.
The VIX hit its highest level since 2020 on Monday.
The index often referred to as Wall Street's "fear gauge" is now at its highest level since March 2020. The VIX is a measure of expected volatility over the next 30 days based on market pricing of S&P 500 options.
— Jesse Pound
Jeremy Siegel
Scott Mlyn | CNBC
Jeremy Siegel, Wharton professor emeritus of finance and chief economist at Wisdom Tree, called on the Federal Reserve to make an emergency 75 point basis cut in the federal funds rate.
He also said there should be another 75 point basis point cut indicated for the September meeting, at minimum, he told CNBC's "Squawk Box."
"That's minimum," he said. "The fed funds rate right now should be somewhere between 3.5 and 4%."
To read more about Siegel's comments, read the full story here.
— Michelle Fox
Warren Buffett
Gerry Miller | CNBC
Gold prices fell as the markets digest the Nikkei 225's 12% drop and a sharp tumble in U.S. stock futures on Monday. The move downward bucked gold's reputation as a safe-haven trend — typically during global market turmoil, gold prices move higher as investors seek to hedge against volatility.
Gold futures shed 1.6% to $2,431.50. Spot gold pulled back 2.2% to $2,390.75.
— Hakyung Kim
The Japanese yen appreciated 2.6% to reach 142.79 against the dollar, its highest level since January.
The Nikkei 225's 12% drop on Monday lent itself to the unwinding of the yen "carry trade." The Bank of Japan's decision to hike interest rates to 0.25%, lowering its rate differential with the U.S., has also driven the yen's jump against the dollar over the last week.
The dollar index fell 0.5% to 102.64 on Monday.
— Hakyung Kim
Nurphoto | Nurphoto | Getty Images
Crypto stocks were among the hardest hit on Monday morning as the price of bitcoin dropped below $50,000 for the first time since February.
Coinbase slid 13%, while MicroStrategy tumbled 17%. Marathon Digital lost 13% and other miners were down double digits as well.
Bitcoin sank more than 13% on Monday to $50,963.57, according to Coin Metrics. At one point, it fell to $49,111.10 — its lowest level since February. It has lost nearly 18% since Saturday.
"Thirty percent slumps, as scary as they are, are par for the course during bull markets and it's encouraging bitcoin bounced back above $50,000," said Nexo co-founder Antoni Trenchev. "But make no mistake, we are in a choppy, volatile market environment ... the moment to turn bullish will be when bitcoin retakes its 200-day moving average, which typically tells us if we are in a bull or bear market, at $61,500."
For more, read our full story here.
— Tanaya Macheel
U.S. futures are tumbling. Japan's Nikkei 225 dropped 12.4% on Monday in the index's worst day since 1987. Here's how some Wall Street investors are reacting to the sell-off.
In a Sunday note, Evercore ISI Chairman Ed Hyman acknowledged that signs of a recession are beginning to become harder to ignore.
"With the soft employment report, the NASDAQ correction, the plunge in bond yields, and the plunge in commodity prices, it's possible we're seeing recession signals coming home to roost," he wrote.
Vital Knowledge's Adam Crisafulli blamed some of the sell-off on investors unwinding some of their positioning in the year's top tech winners. But even against this market pullback, investors cautioned against turning too bearish too fast.
"This is not the time to panic in our opinion," Wedbush analyst Dan Ives told CNBC on Monday morning. "It's not the time to hit the exit buttons."
Read more investor reactions at our CNBC Pro investor reaction live blog.
— Lisa Kailai Han
CBOE Volatility Index
The VIX index, a measurement of market volatility, leapt 72% on Monday to its highest level in nearly four years amid a global equity rout.
The so-called fear gauge was up 72% at 10:07 a.m. in London, rising above 40 for the first time since October 2020, according to LSEG data.
— Jenni Reid
European stocks fell sharply at the start of Monday's session as global volatility continues amid concerns of a looming U.S. recession.
European marketsThe regional Stoxx 600 index was 2.34% lower by 8:52 a.m. London time, with all sectors and major regional bourses trading in the red. Tech stocks shed as much as 5% before paring losses slightly to trade down 2.1%. Oil also lost 3.65%, while banks were 3.22% lower.
— Karen Gilchrist
A man looks at an electronic stock quotation board outside a brokerage in Tokyo, Japan, on Aug. 2, 2024.
Issei Kato | Reuters
— Lim Hui Jie
The second-quarter earnings season has had a solid scorecard thus far. Of the 75% of S&P 500 companies that have reported earnings, 78% have posted positive surprises, according to FactSet data. According to FactSet's John Butters, that is above the five-year average of 77%.
Meanwhile, the S&P 500 blended earnings growth rate — which includes actual results, as well as estimates for companies that have yet to report — was 11.5%. According to Butters, that would mark the highest earnings growth since the fourth quarter of 2021.
Still, corporate earnings season continues this week with some notable names that include the Walt Disney Company, Caterpillar, Costco, Eli Lilly and Super Micro Computer.
On Monday, investors can expect results from companies such as Simon Property Group, Diamondback Energy and Tyson Foods.
— Sarah Min
The July ISM Services PMI, which measures the performance of services companies, is expected to show a rise to 50.9 from 48.8 previously.
The data is due out Monday at 10 a.m. ET.
— Sarah Min
U.S. stock futures opened lower Sunday night.
Dow Jones Industrial Average futures fell 221 points, or 0.6%. S&P 500 futures and Nasdaq-100 futures dipped 0.9% and 1.2%, respectively.
— Sarah Min
