U.S. stocks were set to open sharply lower today, the Associated Press reports, adding to steep declines in Asia and Europe and deepening a sell-off tied to worries about a recession in the U.S. economy. Japan’s main index plunged more than 12% — its worst day since 1987.
S&P 500 futures are down 3.1%, futures for the Dow Jones Industrial Average fell 2.1%, and Nasdaq futures are sinking 4.7%. Investors are fleeing the Big Tech names that until recently had powered the U.S. market higher: Apple fell more than 7%, and Meta was down 6% in premarket trading. Chipmaker Nvidia tumbled 12.5%.
A report Friday showing hiring by U.S. employers slowed last month by much more than expected followed weak reports on manufacturing and construction and stoked fears the U.S. economy was finally bending under the pressure of high interest rates. Investors worldwide sold stocks and moved to the safety of bonds, pushing bond yields sharply lower.
The shakeup began just a couple of days after U.S. stock indexes had jumped to their best day in months after Federal Reserve Chair Jerome Powell set the stage for possible rate cuts to begin in September.
After Friday’s jobs report, however, worries are rising that the Fed may have kept its main interest rate at a two-decade high for too long, raising risks of a recession in the world’s largest economy. Until Friday, there had been relatively few huge market swings in the past year. Still, the U.S. economy continues to grow, and a recession is far from a certainty.
Oil prices slipped this morning, with U.S. benchmark crude oil giving up $1.41 to $72.11 per barrel. Brent crude, the international standard, lost $1.35 cents to $75.46 per barrel.
The Japanese yen also has fallen sharply, trading at 142.37 yen for one U.S. dollar, down from 146.45 late Friday and sharply below its level of over 160 yen a few weeks ago.
