The Dow Jones index plunged 1,000 points, the Nasdaq fell 6%, and global markets are in turmoil: will the weather still be good tomorrow?

U.S. stocks plunge

U.S. stocks experienced significant losses on Monday as part of a global market sell-off driven by fears of a U.S. recession. The Dow Jones Industrial Average fell 1,068 points, or 2.7%; the Nasdaq Composite Index plummeted 6%; and the S&P 500 Index fell 4.2%.

Recession panic + Fed policy concerns

The main reason for the market decline was growing concerns about a U.S. recession, heightened by Friday's disappointing July jobs report. Investors are also worried that the Fed is lagging behind in supporting the slowing economy after cutting interest rates. Instead, the Fed decided last week to keep interest rates at their highest level in two decades.

Technology stocks hit hardest

The unwinding of the previously hot artificial intelligence trade further exacerbated the market decline, and this time technology stocks were among the hardest hit:

• Nvidia shares plunged 14%, having fallen more than 23% from recent highs.
• Apple fell more than 6% as Buffett's investment company Berkshire Hathaway halved its holdings in the company.
• Tesla, Broadcom and AMD fell 10%, 7% and 12% respectively.

( Bitcoin hangs at 60K, cash is king! Buffett sells stocks, and Berkshire’s cash hits a record of $277 billion: no attractive investment )

Global markets follow declines

Japan's Nikkei 225 Index suffers heavy losses

Japan's Nikkei 225 confirmed it was in a bear market, falling 12%, its worst day since Wall Street's Black Monday crash in 1987. The index closed at 31,458.42 points, losing 4,451.28 points, the largest point loss in history.

( Japanese stocks plummeted 6%, carry trades were forced to close, and the yen continued to appreciate )

European markets and Bitcoin take a hit

• Europe's Stoxx 600 fell 3%.
• Bitcoin fell from nearly $62,000 on Friday to about $52,000 on Monday.
• The CBOE Volatility Index surged above 53, reaching its highest level since the early days of the COVID-19 pandemic in 2020.

U.S. Treasury yields fall

U.S. Treasury yields fell as recession fears push investors to seek the safety of bonds. The benchmark 10-year Treasury yield fell to 3.67% on Friday, down from 4.20% the previous week and the lowest level in a year.

Yen carry trade eases intensifying pressure

The Bank of Japan's recent interest rate hikes ended the yen's "carry trade" practice, causing the yen to appreciate against the U.S. dollar, further adding to pressure on global markets.

Some experts believe this is a corrective pullback, with these levels quickly reaching oversold levels.