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1 month ago
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US stock index futures tumbled on Monday - as fears of the United States tipping into recession following weak data last week rippled through global markets.
The tech-heavy Nasdaq plunged 5 percent in premarket trading. It came after Japan suffered its worst sell-off since Black Monday in 1987.
JPMorgan, the world's biggest bank, now says the chances of a recession are at 50 percent. But the dire economic situation will now force the Federal Reserve to cut interest rates more quickly and by a bigger margin than planned - which will bring down borrowing costs for Americans for credit cards, loans and mortgages.
Fears US is heading for recession triggers global stock market plunge with Japan's Nikkei experiencing worst sell-off since 'Black Monday
tock 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.
US stocks are plunging in pre-market trading -with the S&P 500, the benchmark US index, set for biggest opening drop in four years
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.
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