Huge $6.4 trillion global stock market meltdown could be just the start, traders fear

Wall Street fell the most in nearly two years, continuing a global rout in financial markets, as fear worsens that the US economy is slowing down.

The S&P 500 fell 3 percent by the end of trading on Monday. The Dow Jones Industrial Average dropped more than 1,000 points, and the Nasdaq composite slid 3.4 percent.

It followed a 12.4 percent plunge for Japan’s Nikkei 225, its worst day since 1987.

Worries over the economy are front and centre after a series of disappointing reports, including a weaker-than-expected jobs report on Friday.

Big Tech stocks, which have led the market to record after record this year, bore the brunt of the selling.

Stock markets on Monday were almost entirely red - in a meltdown that began in Japan, continued in Europe and ended in the US.

The benchmark Nikkei 225 index in Tokyo - the third largest in the world - crashed by 12 per cent this morning, the biggest single-day fall in almost four decades.

Over the past three week, Bloomberg reports that $6.4 trillion has been wiped from the value of global stock markets.

Almost $1 trillion of that was lost on Monday from US tech stocks, such as Apple and Nvidia.

Apple fell 4.8 percent Monday after Warren Buffett´s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker.

Nvidia, the chip company that´s become the poster child of Wall Street´s AI bonanza, fell even more, 6.4 percent.

Analysts cut their profit forecasts over the weekend for the company after a report from The Information said Nvidia´s new AI chip is delayed.

The recent selling has trimmed Nvidia's gain for the year to nearly 103 percent from 170 percent in the middle of June.

Stock market pain may continue, a Wall Street analyst has claimed after a brutal day for the markets.

‘Things are oversold enough to where stocks will likely rebound and rally soon, but the pain isn’t over just yet,’ Dan Wantrobski of Janney Montgomery Scott told Bloomberg.

‘There’s a good deal to overcome technically before shooting back up to all-time highs,’ the technical strategist explained.

The stock market meltdown may offer a silver lining to millions of Americans.

Mortgage rates look set to fall further - positive news for those looking to get a mortgage and an opportunity for others who borrowed at high rates to refinance.

Just how fast they decline from here is unclear - some analysts see the process taking months to play out, Reuters reports.

Experts say mortgage interest rates will keep trending down from last week's six-month lows of around 6.70 percent for a 30-year fixed-rate mortgage, the most popular US home loan.

Wall Street's most-watched gauge of investor anxiety logged its largest ever intraday jump on Monday and closed at its highest since October 2020.

Traders scrambled to hedge against market volatility during a global selloff fueled by US recession fears.

The Cboe Volatility Index - known as the VIX - jumped to a high of 65.73 before the market open, up about 42 points from its close on Friday.

The index - which measures investor demand for protection against stock swings -pared gains and closed at 38.57, its highest close in nearly four years.

The surge in the VIX dwarfed moves in the volatility index that took place during past bouts of intense selling - including the Covid-related massive selloff in March 2020, when the S&P 500 sank more than 10% in a single day.

Joe Tigay, portfolio manager for Rational Equity Armor Fund said the VIX´s move, which comes on the heels of a three-day selloff that began on Thursday, was ‘very, very unusual.’

‘There's no question that last week something was broken (in markets) and it's going to take some time to fix this damage,’ he said.

The ongoing global stock sell-off has fueled calls for the US Federal Reserve to lower interest rates swiftly and decisively.

Some analysts are now calling for it to make an emergency cut before its September rate decision.

Bankers and investors - who as recently as last week expected a single quarter percentage-point cut at the US central bank's next rate decision in September - now see a half-point cut as much more likely, according to data from CME Group.

But some analysts fear that may not be soon enough, as the markets have responded in dramatic fashion to last week's below-target US jobs report, which raised fears that the US was entering a recession.

'I'm calling for a 75-basis point emergency cut in the Fed funds rate, with another 75-basis point cut indicated for next month at the September meeting,' Wharton School professor emeritus of finance Jeremy Siegel told CNBC on Monday morning. 'And that's minimum.'

'I wasn't calling for an inter-meeting cut, because that might signal panic,' the Nobel prize-winning US economist Paul Krugman wrote in a social media post on Monday.

'But since we may be seeing a panic anyway, that argument loses its force,' he said, adding: 'Real case for an emergency cut soon.'

Stock market pain may continue, a Wall Street analyst has claimed after a brutal day for the markets.

‘Things are oversold enough to where stocks will likely rebound and rally soon, but the pain isn’t over just yet,’ Dan Wantrobski of Janney Montgomery Scott told Bloomberg.

‘There’s a good deal to overcome technically before shooting back up to all-time highs,’ the technical strategist explained.

The S&P 500 and Nasdaq indices fell 3 percent on Monday, following concerns over the US economy.

'If you’re tweaking based on today’s decline, you’re doing it all wrong,' Noah Damsky, a financial adviser in Los Angeles, told the Wall Street Journal.

The rationale is that you should not make investment decisions based on emotions.

One exception is that investors might use it as an opportunity to use cash to buy shares that have slumped in value.

“A good strategy to avoid buyer’s remorse if markets continue to fall or turn up is to buy at predetermined time intervals,” Francisco Ayala, a financial planner in Phoenix, also told the WSJ.

That might be investing 10 percent of your savings over a ten week period.

It can be a time to turn any cash in your retirement account into stocks.

‘Right now is a great time to make sure you don't have extra cash laying around in your 401(k),’ Matt Fizell, a financial planner in Madison, Wisc, told the WSJ..

‘If you're five or more years out from retirement, it's unlikely you'll need liquidity in this type of account.’

The final 15 minutes of trading on a normal day can see the biggest moves of the day.

A scary Monday that started with a plunge abroad reminiscent of 1987 's crash has swept around the world and pummeled Wall Street with more steep losses, as fears worsen about a slowing US economy.

The S&P 500 was down by 3.1 percent in late trading and on track for its worst drop since 2022.

The Dow Jones Industrial Average was reeling by 1,009 points, or 2.5 percent, with a little more than an hour remaining in trading, and the Nasdaq composite slid 3.8 percent.

Jim Cramer on CNBC: 'If you care about your paycheck, you go with Trump.'

Into the last hour of trading on Wall Street, the major indices were down heavilyt

S&P 500 -3.3 percent

Nasdaq -3.5 percent

Pringles maker Kellanova saw its stock rise more than 15 percent on Monday as much of the index tumbled into the red.

The stock enjoyed a boost after reports that food conglomerate Mars was looking to buy the snackmaker.

Talks between the companies are still taking place with no final decision yet made, Bloomberg reported.

Kellanova makes many beloved American treats including Cheez-Its and Pop Tarts.

Google lost a major federal lawsuit as a judge ruled on Monday that the company used illegal practices to preserve its search engine monopoly.

A federal judge ruled that Google paying Apple, Samsung and others billions of dollars for prime placement on its smartphone web browsers violated antitrust law.

The ruling will be considered a coup for the Justice Department as it attempts to rein in tech giants power.

It comes as Alphabet, Google’s parent company, saw its stock slide around 4.5 percent by Monday afternoon amid the day’s market turmoil.

After Joe Biden tweeted about his record of wiping student loan debts, users of X, formerly known a Twitter, criticized

the President.

One wrote: ‘You stole from the American taxpayers.’

Another said: ‘All you did was transfer it to the national debt, and now there is interest tied to it.’

Someone else tweeted: ‘Debt isn't simply canceled. It's just moved onto the backs of the responsible people. Thanks a lot.’

Earlier, Biden had written on X: ‘In three years, my Administration canceled student debt for nearly 5 million borrowers through various actions, made the largest increases to the Pell Grant in a decade, and fixed Income-Driven Repayment so borrowers get the relief they are entitled to.

‘I'm not done yet.’

Warren Buffett’s Berkshire Hathaway saw at least $15 billion wiped off its portfolio value after a global stock market sell off.

The sell-off began on Friday but has picked up pace today, with indices including the Nasdaq and the S&P 500 dragged lower.

The hit to Berkshire Hathaway’s enormous stock empire came as some of its key holdings including Apple, Bank of America and Mitsubishi plummeted.

The company's own shares dipped around 3 percent by Monday afternoon, leaving it with a market cap of $897 billion.

The hit comes despite Berkshire Hathaway continuing to slash its stock holdings in recent months, building a cash reserve of $277bn last quarter.

Despite recently halving its stake in Apple, the value of its holding in the tech giant still lost $5.7bn on Monday as its stock plummeted around 7 percent, The Telegraph reported.

Just four hours into the trading day and more than 2.3 billion shares had been bought and sold.

At this rate, more than 5 billion shares will have changed hands.

That has only happened a few times in the past 15 years.

‘In three years, my Administration canceled student debt for nearly 5 million borrowers through various actions, made the largest increases to the Pell Grant in a decade, and fixed Income-Driven Repayment so borrowers get the relief they are entitled to,’ President Joe Biden wrote on X.

‘I'm not done yet.’

The S&P 500 was down by 2.4 percent in afternoon trading.

The Dow Jones Industrial Average was reeling by 864 points, or 2.2 percent, as of 1.25pm in New York and the Nasdaq slid 2.8 percent.

The drops were just the latest in a global sell-off that began last week. Japan´s Nikkei 225 helped start Monday by plunging 12.4 percent for its worst day since the Black Monday crash of 1987.

It was the first chance for traders in Tokyo to react to Friday’s report showing US employers slowed their hiring last month by much more than economists expected.

That was the latest piece of data on the U.S. economy to come in weaker than expected, and it's all raised fear the Federal Reserve has pressed the brakes on the US economy by too much for too long through high interest rates in hopes of stifling inflation.

Charles Schwab and Fidelity say they have fixed the technical issues that prevented some retail investors from logging into their accounts.

‘A technical issue experienced by some clients has been resolved. We apologize for the inconvenience,’ Charles Schwab wrote on X.

Traders in the US are betting the Federal Reserve will have to cut rates by half a percentage point in September instead of the usual quarter point.

Some are calling for an emergency rate cut.

However, there are opposing voices saying the sell-off is actually a good thing because stock prices had risen too high.

The Fed only makes emergency cuts - those outside of normal scheduled meetings - in very rare cases. The last one was in March 2020 - as Covid hit the markets.

Many experts have blamed fears of a US recession on Jerome Powell and the Fed for being too slow to cut rates.

The Fed had put rates up to curb spending among Americans and bring prices down. But if rates are too high for too long they can curb spending too much, which in turn can lead to a recession.

Official Fed rates are a benchmark for the rates charged by banks for mortgages, credit cards and loans.

The major stock sell-off that began on Friday was largely caused by Japan raising interest rates and geopolitical concerns in the Middle East - not signs of a weaker US economy, a Wall Street veteran says.

‘I think to a large extent the Friday sell-off had more to do with the carry trade unwinding,’ rather than weaker jobs data, Ed Yardeni, president of Yardeni Research, told Bloomberg.

A carry trade is when an investor borrows money in a currency with low interest rates. This had been happening with global investors borrowing in Japan. where interest rates were very low unlike most countries like the UK and the US.

But the Japanese central bank has actually raised its interest rates in recent days - meaning investors want to get out of trades they have in their currency, the Yen.

Yardeni said that the US economy is still growing, the labor market is still in good shape and the service economy is doing well.

However, he acknowledged that the carry trade unwinding could become some sort of financial crisis reminiscent of 1987’s ‘Black Monday’, but argued that it is more likely to be a ‘technical aberration in the market rather than something that turns into a recession.’

‘The other issue is geopolitical risk and everyone is concerned about a wider war in the Middle East.’

‘This is very reminiscent, so far, of 1987,' verteran market watcher Ed Yardeni told Blommberg TV.

‘We had a crash in the stock market [in 1987] - that basically all occurred in one day - and the implication was that we were in, or about to fall into, recession.

‘And that didn’t happen at all. It had really more to do with the internals of the market.’

Earlier in the day, Yardeni - president of Yardeni Research - told Yahoo that the stock sell-off is not ‘attributable to an imminent recession or that we're in a recession now’.

He added: ‘I think this too shall pass and I think the economy is going to prove to be surprisingly resilient.’

Dow Jones index down 1.99 percent

S&P 500 down 2.37 percent

Nasdaq down 2.95 percent

The UK's main stock index kicked off the week on a downbeat note

The blue-chip FTSE 100 index fell 2 percent to its lowest since April 2022 and clocked its worst day in over a year.

Europe's broad STOXX 600 share index finished down 2.1 percent, having recovered somewhat from its earlier lows.

France's CAC40 lost 1.4 percent and Germany's Dax fell 1.8 percent

Former President Donald Trump blasted out alarming posts Monday and tore into rival Kamala Harris shortly before the Dow shed 1,200 points following a global sell-off amid fears of a recession.

Trump branded it a 'KAMALA CRASH!', in an indication of a how a steep market dive could be the latest issue to light up the presidential race.

His blasts came after market turmoil and potential job losses became the latest factor to upend the election cycle, in a race where Harris has been planning to sell her campaign around millions of job gains and casting Trump as 'weird.'

The Dow was now recovered to be down 800 - still a huge slump.

He said  Harris, who has been rising in the polls, would ‘destroy’ the markets’ and that a Trump loss would drive market turmoil.

‘There is definitely a culmination of events that came together at the end of last week,’ Victoria Fernandez, Crossmark Global Investments chief market strategist told Bloomberg as markets across the board plunged on Monday morning.

‘The market is not reacting this way because the non-farm payrolls came in 60,000 less than expected. I think that was just the straw that broke the camel's back,’ she said.

Fernandez told the outlet that weaker guidance on earnings, yields starting to come down and other weaknesses in the labor market besides payroll, were all ‘elements churning under the surface that were telling us that growth was going to be coming back [down].’

When you add in the fact that Japan raised rates and the expectation that the US would be lowering them in September the market began to think things were not as rosy as they thought, Fernandez explained.

Markets began to worry that ‘maybe that soft landing is not a given and that’s why we are seeing the reactions we are,’ she told Bloomberg.

‘We also have geopolitical events going on which adds to the uncertainty,’ she concluded.

Bank stocks slumped on Monday as fears of a recession sent investors fleeing from a sector closely tied to the health of the economy and toward safe-haven assets.

Citigroup led big bank losses with a 6 percent fall. Wells Fargo, Bank of America and Goldman Sachs fell about 4 percent each, while JPMorgan Chase and Morgan Stanley declined 2.5 percent and 3.5 percent, respectively.

Lenders are highly susceptible to an economic downturn as recessions heighten concerns over credit losses due to higher unemployment, while loan demand - a key factor in profitability - also takes a beating.

Gold, Copper and Crude Oil fell on Monday as traders place bearish bets on the raw-material market.

Gold fell 0.91 percent and Copper slid 3.8 percent on the London Metal Exchange. Crude Oil fell 0.41 percent.

‘Markets like oil and copper appear to be pricing in a recession, which equity and bond markets are doing as well,’ said Matthew Schwab from Quantix Commodities, told Bloomberg.

US stocks fell Monday morning as part of a global market sell-off.

DailyMail.com has summarized what it means for the ordinary American.

The sell-off is a blow to Americans with retirement savings in 401(K) plans, which tend to be invested in major stock market indices. It will also impact interest rates, which set a guidepost for credit card and mortgage rates.

We cover off all of those and whether it might mean more job losses.

Wall Street's most watched gauge of investor anxiety logged its largest ever daily jump on Monday.

The Cboe Volatility Index, or VIX, hit the highest level in four years - when it last spiked as Covid shut down the economy.

There are rising fears the United States could be tipping into recession.

Since early 2020, the VIX has been stable - never closing above 40

The VIX jumped to a high of 65.73, up about 42 points from its close on Friday.

Wall Street looked continued the global stock rout that saw Japanese shares at one point exceed their 1987 ‘Black Monday’ loss.

Arund midday in New York, the VIX had pared gains and was last up 12.5 points at 35.98 after jumping 42 points earlier.

‘This is very, very unusual,’ said Joe Tigay, portfolio manager for Rational Equity Armor Fund.

The return of volatility comes after an unusually long period of market calm, where the S&P 500 went 356 sessions without a 2 percent or larger move lower, the longest such streak since 2007.

‘It was just too long of a period where stocks were going up and there was just the assumption that all they have to do is just wait, and then they'll go higher at some point,’ Tigay said. ‘At some point that snaps out of reality.’

The S&P 500, down 3.4 percent this morning, is close to falling into correction.

A correction is when an index falls 10 percent or more from its high, which the S&P hit on July 16. It is currently down 8.6 percent from that benchmark.

The Nasdaq, down around 3.7 percent, has been in correction since last week and is continuing to slump. It is down around 14 percent from its all-time high.

Online brokerages including Charles Schwab and Fidelity Investments were down for thousands of users on Monday, according to outage tracking website Downdetector.com.

The reports come against the backdrop of a global rout, with Wall Street's indexes tumbling at the open after weak economic data and drab second-quarter earnings sparked recession fears and prompted a rush out of everything from equities to crypto.

Schwab was down for more than 15,300 users while outage reports on Fidelity reached over 3,000, Downdetector showed.

The website tracks outages by collating status reports from several sources including users.

Vanguard and TD Ameritrade also saw thousands of outage reports, the website showed.

Bitcoin fell more than 15 percent on Monday morning to $50,000, according to Coin Metrics.

The cryptocurrency is set for its worst day since June 2022, despite recently trading at near $70,000.

Other crypto stocks took large losses in the first hour of trading.

Ether lost 19 percent, Coinbase also dipped 19 percent and Microstrategy dropped 26 percent.

Jeff Bezos has lost $15billion in a single day leading to a massive $134billion stock slump for the world's 500 richest people including Mark Zuckerberg and Elon Musk.

Shares of Amazon.com Inc went down by 8.8 per cent on Friday as part of a wider sell-off in the market, according to Bloomberg. This dropped Bezos' net worth to $191.5billion, because of his wealth being wrapped up in his company.

Bezos has been repeatedly offloading Amazon shares this year, selling $8.5billion in stocks in February and announcing plans to sell another $5billion worth of shares, which would still leave him with 912 million shares, or 8.8 per cent of the stock.

Wells Fargo and Goldman Sachs both fell more than 5 percent in the first hour of trading.

Bank of America dipped 4.5 percent, and J.P. Morgan Chase traded around 3 percent lower on Monday morning.

Downdetector, which monitors when apps and websites are not working, reported issues with several of the the most popular trading platforms.

Those affected included Robinhood, E-Trade, Fidelity, Ameritrade and Charles Schwab.

The group - consisting of Nvidia,Tesla, Amazon, Meta, Alphabet (Google), Microsoft and Apple - opened 9 percent lower collectively, according to Bloomberg analysis.

This is the worst day-on-day drop for the companies since market data began grouping them in 2015.

Nvidia dropped a huge 14 percent at the start of market trading in New York.

The dip wiped off around $360 billion in market value, making it potentially the biggest one day drop for a company in stock market history.

Apple slid 8 percent after Warren Buffett’s Berkshire Hathaway halved its stake in the technology giant.

The S&P 500 opened lower by 195.42 points, or 3.66 percent, at 5,151.14.

The tech-heavy Nasdaq dropped 1,063.63 points, or 6.34 percent, to 15,712.53 at the opening bell.

It means both are down the most in nearly two years.

The Dow Jones Industrial Average fell 681.07 points, or 1.71 percent, at the open to 39,056.19.

All will hit American's retirement savings, with 401(K)s heavily invested in the main indices.

Wall Street's most watched gauge of investor anxiety logged its largest ever intraday jump on Monday, as US stock futures tumbled on rising fears the United States could be tipping into recession.

The CBOE Volatility Index jumped to a high of 65.73, up about 42 points from its close on Friday, as Wall Street looked set to continue the global stock rout that saw Japanese shares at one point exceed their 1987 "Black Monday" loss.

The VIX was last up 34 points at 57.15, its highest since March 2020.

'It seems like a liquidity crisis ... this is very, very unusual,' said Joe Tigay, portfolio manager for Rational Equity Armor Fund.

A circuit breaker is a temporary pause in trading if stock market indices drop too far.

If the S&P 500 drops 7 percent on the last trading day’s close there will be a 15 minute pause in trading.

If there is then a 13 percent drop before 3:25 pm there will be a second 15 minute pause.

If the index drops by 20 percent markets will close for the day.

Circuit breakers are common for individual stocks, but extremely rare for the main indices.

The last time they were seen for the likes of the S&P 500 was during the early stages of the pandemic.

Shares of Nvidia are down 14 percent in premarket trading - ahead of the stock market opening at 9.30am New York time.

That will wipe off almost $360 billion in market cap from the AI stock darling.

That would be the biggest destruction in market value in ever.

The stock has soared in value this year amid hype about artificial intelligence.

S&P 500 futures are down 3.1 percent and Nasdaq futures are sinking 4.7 percent.

Investors are fleeing the Big Tech names that until recently had powered the U.S. market higher: Apple fell more than 7 percent and Meta was down 6 percent in premarket trading. Chipmaker Nvidia tumbled 12.5 percent.

The losses in the Magnificent Seven stocks were set to wipe out nearly $1 trillion from the combined market value of the companies.

After driving gains on Wall Street for more than a year, big technology stocks have come under pressure in the past few weeks also on signs that the payoff from hefty AI investments would take longer than some investors had initially hoped.

Shares of Amazon, Microsoft and Alphabet - the three biggest providers of cloud-computing services - fell as their earnings reports dashed big bets of hefty AI investments translating quickly into growth.

Stock markets around the globe have continued to plunge on Monday amid fears the US economy may be on track for a recession as Japan suffered its worst sell-off since 'Black Monday' in 1987.

Experts at investment bank Goldman Sachs said they now believed there was a staggering 25 per cent chance of a recession in the US - up ten percent from their previous estimate of 15 per cent, while JP Morgan put the chances of a recession at 50 per cent.

US stock index futures tumbled on Monday, with those tied to the Nasdaq falling nearly 4 per cent, but traders are now ramping up bets that the Federal Reserve will announce an emergency interest rate cut in response to the global stock market crash and to avoid a huge recession.

A leading economist has issued a dire warning about the US economy - tearing into the Federal Reserve for a 'policy blunder' that could send the country into recession.

Mohamed El-Erian, the chief economic advisor at Allianz, said on Sunday he fears the economy may be spiraling following a dismal unemployment report last week.

He places the blame on the Fed for keeping its main interest rate at a two-decade high since 2022 in its zeal to stifle inflation.