US Markets Plunge as Recession Fears Rekindle, Nasdaq Sinks 2.3%
Saturday, Aug 3, 2024 3:00 am ET
On Thursday, major U.S. indices took a significant hit as concerns about a potential economic recession resurfaced, fueled by weak economic data. The Nasdaq dropped by 2.3%, and the Dow Jones Industrial Average (DJIA) slid approximately 500 points. Among the critical indicators, the U.S. ISM Manufacturing data showed contraction for the fourth consecutive month, and initial jobless claims surged, further stoking fears of an economic downturn.
By the closing bell, the Dow had tumbled by 494.82 points, a decline of 1.21%, finishing at 40,347.97 points. The Nasdaq plunged 405.25 points, or 2.3%, to settle at 17,194.15 points. The S&P 500 index also experienced a decline, losing 75.62 points, or 1.37%, to close at 5,446.68 points. Notably, AMD saw a drop of over 8%, NVIDIA fell by 6.67%, and Tesla decreased by 6.55%.
The release of the latest labor market data showed initial jobless claims reaching the highest level in nearly a year, suggesting a slowdown in the labor market. According to the U.S. Department of Labor, claims rose by 14,000 to 249,000 for the week ending July 27, surpassing market expectations of 236,000. Continuing claims also climbed to 1.88 million for the week ending July 20, the highest since November 2021.
The manufacturing sector added to these concerns, with July seeing a drop in new orders and a significant slowdown in producer price inflation. Analysts noted that while manufacturing showed signs of a downturn, inflation pressures within the sector eased markedly, setting the stage for potential decreases in consumer price inflation in the coming months.
As recession fears mounted, the sell-off in U.S. markets was mirrored by declines in European and Asian markets. Germany’s DAX30 index fell by 2.3%, France’s CAC40 dipped 2.14%, and the broader European Stoxx 50 index dropped by 2.2%. The Asian markets also reflected this pessimism, with Japan’s Nikkei 225 down by 2.49%, Indonesia’s Jakarta Composite Index falling by 0.85%, and Vietnam’s VN30 index dropping by 2.09%.
In commodities, oil prices took a hit amid concerns about weakened demand. WTI crude for September delivery fell by $1.60, or 2.06%, to $76.31 a barrel. Brent crude for October delivery declined by $1.20, or 1.49%, to $79.52 a barrel.
The U.S. equity markets' sharp reactions underline the uncertainty and concern pervading the investor community as economic indicators continue to suggest a slowing economy. Market participants are looking ahead to more data from the Federal Reserve and upcoming earnings reports to gauge the economy's trajectory and potential monetary policy responses.
By the closing bell, the Dow had tumbled by 494.82 points, a decline of 1.21%, finishing at 40,347.97 points. The Nasdaq plunged 405.25 points, or 2.3%, to settle at 17,194.15 points. The S&P 500 index also experienced a decline, losing 75.62 points, or 1.37%, to close at 5,446.68 points. Notably, AMD saw a drop of over 8%, NVIDIA fell by 6.67%, and Tesla decreased by 6.55%.
The release of the latest labor market data showed initial jobless claims reaching the highest level in nearly a year, suggesting a slowdown in the labor market. According to the U.S. Department of Labor, claims rose by 14,000 to 249,000 for the week ending July 27, surpassing market expectations of 236,000. Continuing claims also climbed to 1.88 million for the week ending July 20, the highest since November 2021.
The manufacturing sector added to these concerns, with July seeing a drop in new orders and a significant slowdown in producer price inflation. Analysts noted that while manufacturing showed signs of a downturn, inflation pressures within the sector eased markedly, setting the stage for potential decreases in consumer price inflation in the coming months.
As recession fears mounted, the sell-off in U.S. markets was mirrored by declines in European and Asian markets. Germany’s DAX30 index fell by 2.3%, France’s CAC40 dipped 2.14%, and the broader European Stoxx 50 index dropped by 2.2%. The Asian markets also reflected this pessimism, with Japan’s Nikkei 225 down by 2.49%, Indonesia’s Jakarta Composite Index falling by 0.85%, and Vietnam’s VN30 index dropping by 2.09%.
In commodities, oil prices took a hit amid concerns about weakened demand. WTI crude for September delivery fell by $1.60, or 2.06%, to $76.31 a barrel. Brent crude for October delivery declined by $1.20, or 1.49%, to $79.52 a barrel.
The U.S. equity markets' sharp reactions underline the uncertainty and concern pervading the investor community as economic indicators continue to suggest a slowing economy. Market participants are looking ahead to more data from the Federal Reserve and upcoming earnings reports to gauge the economy's trajectory and potential monetary policy responses.