U.S. Stock Futures and Crypto Prices Plummet
The American stock market's future appeared dim on Sunday evening, following a week of tumultuous trading on Wall Street that resulted in the Nasdaq entering correction territory.
Nasdaq 100 futures plunge 6%, S&P 500 futures fall 3%, extending last week's losses and fueling concerns over the global economic outlook, particularly worries about the Federal Reserve's slow pace of interest rate cuts.
Amid escalating tensions in the Middle East, crude oil futures saw a modest increase. Cryptocurrencies, particularly bitcoin, experienced a downturn, with bitcoin falling 8% and dipping below the $55,000 mark after surpassing $65,000 on Friday. Ether, meanwhile, plunged by over 15%.
In Asia, The Nikkei 225 index entered bear market territory, falling more than 21% from its July high. The index plummeted by 12% in afternoon trading, shedding over 4,500 points in a single day.
U.S. equities took a nosedive on Friday following a weaker-than-anticipated jobs report, which stoked concerns about economic expansion. This followed the Federal Reserve's indication on Wednesday that it might reduce interest rates in September. Nonetheless, investors are apprehensive that such cuts may be too little, too late, as the risk of a recession looms.
Last week, all three major U.S. stock indexes suffered significant losses, with the S&P 500 dropping 2.1% — its worst performance since April. The Dow and Nasdaq also recorded weekly declines of 2.1% and 3.4%, respectively. According to Dow Jones Market Data, the Nasdaq ended Friday 10% below its July 10 record, entering correction territory.
Stephen Innes, managing partner at SPI Asset Management, described the market's mood in a note on Sunday: "Investors are scrambling for hedges amidst a mounting panic over interest rates and an impending recession. The sudden spike in volatility is a clear sign of the market's nervousness."
Innes posed a critical question: "In the face of this abrupt and severe recession scare, can the market's usual response of selling volatility or buying the dip overcome the deep-seated anxiety?"
Investors might be preparing for further declines in tech stocks on Monday, following news that Warren Buffett's Berkshire Hathaway significantly reduced its stake in Apple Inc. last quarter.
Tech stocks have been under pressure due to disappointing earnings reports, including a 26% plunge in Intel Corp.'s stock on Friday following its underwhelming earnings announcement.