Global Stock Markets Plummet as “Black Monday” Hits Japan
Amid panic across bourses over fears of recession in the US, global stock markets plunged. Wall Street’s tech-heavy Nasdaq Composite index tumbled 6.3 percent at the open, with the S&P 500 falling 4.2 percent and the Dow dropping 2.7 percent. Major European indices were down around 3 percent in afternoon trading.
Tokyo’s Nikkei Suffers Worst Day Since Fukushima Crisis
Tokyo’s Nikkei tanked more than 12 percent in its worst day since the Fukushima crisis in 2011. It also suffered its biggest ever points loss, shedding 4,451.28. The market meltdown was triggered by a weak US jobs report on Friday which showed the unemployment rate reached its highest since October 2021.
Black Monday: A Historical Reference
Black Monday refers to the global, severe and largely unexpected stock market crash on Monday, Oct. 19, 1987. Global losses were estimated at $1.71 trillion. The severity of the crash sparked fears of extended economic instability or even a reprise of the Great Depression.
Concerns of Recession and Market Reactions
Goldman Sachs economist David Mericle sees a higher chance of a recession following Friday’s jobs report. But he still sees only a 25 percent chance of that, up from 15 percent, in part “because the data look fine overall” and he does not “see major financial imbalances.” Stocks of companies whose profits are most closely tied to the economy’s strength took heavy losses on the fears about a sharp slowdown.
Big Tech Stocks Take a Hit
Making things worse for Wall Street, Big Tech stocks also tumbled sharply as the market’s most popular trade for much of this year continued to unravel. Apple, Nvidia, and other Big Tech stocks known as the “Magnificent Seven” had propelled the S&P 500 to dozens of all-time highs this year, in part on a frenzy around artificial-intelligence technology. They were so strong that they overshadowed weakness for areas of the stock market weighed down by high interest rates. Apple fell 4.6 percent on Monday after Warren Buffett’s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker. Nvidia, the chip company that’s become the poster child of Wall Street’s AI bonanza, fell even more, 8.3 percent.