Over $2.9 trillion has been wiped out from major indices and stocks this morning, marking one of the most significant market downturns since the COVID-19 pandemic's initial shockwaves in March 2020. Growing fears of a global recession have led to a massive sell-off, leaving investors and financial analysts scrambling to assess the potential long-term impacts on the economy.
Major global stock indices, including the S&P 500, Dow Jones Industrial Average and NASDAQ have all experienced significant drops.
Precipitous declines have also been recorded in Asian and European markets.
Monday's drop extended a sell-off that had begun last week, after the U.S. jobs report on Friday that showed significantly slower hiring, with unemployment rising to its highest level in nearly three years. This deepened fears that the world's largest economy could be sliding into a recession and that the Federal Reserve may have waited too long to cut interest rates.
The drop was exacerbated by other factors — concerns that technology stocks had run up too far too fast, and that a suddenly strengthening yen would hurt the prospects of Japanese companies and some global traders — both hit markets too.
Wall Street's “fear gauge,” the VIX volatility index, surged on Monday, reaching its highest level since the onset of the pandemic. The index measures how much investors think stocks will swing over the next month: The sharp rise is a sign that there is a lot of worry, even as some investors have sought to calm the current sense of panic.
“Markets are a little bit out of control,” remarked Andrew Brenner, head of international fixed income at NatAlliance Securities. “This is just total panic. It's not real but it is painful and it could be with us for a few weeks.”
Japanese markets have experienced the largest one-day decline ever, surpassing the crash seen on Black Monday in 1987.
This is a breaking news story. Please check back for updates.
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