U.S. Stocks Plunge as Recession Fear Takes Hold

The major stock indexes fell sharply on Monday morning, reflecting heightened fears that the U.S. economy may be headed for a serious economic slump. The decline highlights the level of worry among investors since economic data released last week showed unemployment rising and job growth slowing more than expected. Surveys of manufacturers also indicated a
U.S. Stocks Plunge as Recession Fear Takes Hold

The major stock indexes fell sharply on Monday morning, reflecting heightened fears that the U.S. economy may be headed for a serious economic slump.

The decline highlights the level of worry among investors since economic data released last week showed unemployment rising and job growth slowing more than expected. Surveys of manufacturers also indicated a steep fall off in activity in the sector, which is often a bellwether for the economy.

The economy added just 114,000 jobs in July, according to the Department of Labor, significantly below the 180,000 forecast. Seperate surveys of business executives known as purchasing managers by the Institute for Supply Management and S&P Global both showed that factory activity had contracted in the month.

The Dow Jones Industrial Average fell 2.3 percent after the opening bell. The Nasdaq Composite plunged four percent. The S&P 500 fell by 3.1 percent. The Russell 2000 index of smaller-sized companies fell by 5.1 percent.

The Cboe Volatility Index (VIX)—often called the “fear index”—exploded higher. Prior to a sharp rise in Friday, the VIX had been on a 190-day streak of closing below the historical long-term average of 20, the longest stretch below the average since 2018. On Monday morning, it hit 55, the highest level since the pandemic’s worst days.

The market in federal funds futures, a derivative that allows investors to speculate on Federal Reserve monetary policy, now reflects a nearly 90 percent chance that the Fed’s target will be a half a percentage point lower than the current benchmark after the September meeting. That could imply a larger-than-usual 50 basis point cut at that meeting or an extremely rare cut in August outside the scheduled Fed meeting.

Politics may be playing a role. Vice President Kamala Harris has risen in the polls, with some election forecasts now saying she is slightly favored to win in November. The market had been rising during the months when Trump was seen as the winner.

Total
0
Shares
Leave a Reply
Related Posts
Sick serial killer Levi Bellfield who murdered 13-year-old Milly Dowler is BLOCKED from having a civil partnership after new rules introduced to stop the most serious offenders from getting married behind bars
Read More

Sick serial killer Levi Bellfield who murdered 13-year-old Milly Dowler is BLOCKED from having a civil partnership after new rules introduced to stop the most serious offenders from getting married behind bars

Serial killer Levi Bellfield has been blocked from having a civil partnership, after a new law came into force stopping the most serious offenders getting married behind bars. Bellfield is serving two whole life orders for killing 13-year-old Milly Dowler, Marsha McDonnell and Amelie Delagrange, as well as the attempted murder of Kate Sheedy. It
Migrants smile and wave for the cameras as they arrive in Dover – as number to cross the Channel in small boats this year hits nearly 17,000
Read More

Migrants smile and wave for the cameras as they arrive in Dover – as number to cross the Channel in small boats this year hits nearly 17,000

Migrants were shown smiling, waving and sticking two fingers up after arriving in Dover today, as the total number of who crossings this year approaches 17,000. No arrivals were recorded at the start of the month yesterday, but small boat crossings from France to England resumed today. Pictures showed groups of people wearing life jackets
‘This isn’t sport… explain why you’re OK with a man beating a woman to entertain you’: JK Rowling condemns ‘bullying cheat’ Imane Khelif and ‘disgraceful’ Olympic chiefs after female boxer is forced to quit after 46 seconds
Read More

‘This isn’t sport… explain why you’re OK with a man beating a woman to entertain you’: JK Rowling condemns ‘bullying cheat’ Imane Khelif and ‘disgraceful’ Olympic chiefs after female boxer is forced to quit after 46 seconds

A fuming JK Rowling last night slammed an Olympic boxing match as 'a man beating a women in public for entertainment' after a female boxer once disqualified for failing a gender test forced out an Italian opponent. A global backlash, led by Italy's prime minister and the Harry Potter author, ensued after Angela Carini quit to 'save