World markets crash: US and Asian stocks plummeting

On Monday morning, the Japanese stock market declined, influencing global stock prices during Asian trading.

According to Bloomberg, the global market situation is causing concern.

The S&P 500 has shown the biggest one-day drop since September 2022.

The Nasdaq 100 dropped by 3%, resulting in a loss of $907 billion in market value.

The VIX volatility index reached its highest level since October 2020.

Markets are starting to bet on a decrease in key interest rates by central banks.

Christian Mueller-Glissmann of Goldman Sachs noted that the observed market decline represents "a somewhat healthy correction."

He also mentioned that weak economic data from the US was unexpected, but Goldman Sachs economists do not see this as a serious threat.

Major US tech companies are also experiencing significant declines:

Shares of leading American companies on the German Tradegate exchange have started to lose ground.

Nvidia fell by 17% on the stock exchange in the morning. Among other leaders of the decline: Apple (-10%), Microsoft (-9%), Alphabet (-9.6%), Amazon (-9.3%), Meta (-10%), and Tesla (-10%).

Shares of the largest American companies are falling in pre-market trading, with Nvidia leading the decline, losing 8.8%. By 11:30, AI sector stocks had fallen by 9.6%, and Apple by 6.1%. Microsoft, Meta, and Tesla also lost over 5%.

By 14:10, shares of tech giants in the "Magnificent Seven" had significantly decreased: Nvidia, Apple, and Tesla fell by more than 7% in pre-market trading. Together, these seven stocks account for about 43% of the Nasdaq 100 index's weight.

By 15:20, Nvidia shares began to decline again, falling by 14%, while Apple fell by more than 8%. Nvidia's market capitalization decreased by $358 billion, and Apple's by $277 billion.

Official trading in the US opened at 16:35, with overall sentiment remaining unchanged.

By 16:41, more than 455 S&P 500 stocks were in the red, including Nvidia, Super Micro Computer, and Citigroup.

According to Bloomberg, the "Magnificent Seven" index (the largest tech companies) opened with a 9% drop, the biggest one-day decline since 2015.

By 17:03, key indices had reached their session highs. The Nasdaq 100 fell by 2.8%, the S&P 500 by 2.6%, and the Russell 2000 by 4.2%. Nvidia partially recovered from the drop, losing only 5.1%.

At the close of trading in the US, Apple shares fell by 4.8%, marking the worst day since September 2022. Nvidia dropped by 6.4%, and Microsoft by 3.3%. The "Magnificent Seven" index decreased by 4.3%.

Situation in Asia:

The Japanese currency depreciated by 3.3% to 141.70 per dollar, a level not seen since January, causing volatility in the Asian currency, stock, and bond markets after weak US employment data.

The Japanese Nikkei index fell by 12.40%, the biggest one-day drop since October 1987, while the broader Topix index lost 12.48%.

The MSCI Asia Pacific index fell by 4.3%, erasing profits for 2024. Among the region's largest companies, such as TSMC, Samsung Electronics, Toyota, and Mitsubishi UFJ Financial, the overall decline accounted for more than a third of the index.

The yield on two-year Japanese Treasury bonds fell by eight basis points, while 10-year government bond yields dropped by 16 basis points.

Japanese banks also felt the market volatility: shares of Mizuho Financial Group fell by 19.7%, Mitsubishi UFJ Financial Group by 17.8%, Resona Holdings by 19.5%, and Sumitomo Mitsui Financial Group by 15.5%.

Stock markets in other Asia-Pacific countries also suffered losses. The Taiwanese Taiex index fell by more than 8%, the South Korean KOSPI index by more than 9%, the Singaporean Straits Times Index by 4%, and the Australian All Ordinaries by 3%.

Stock indices:

Nasdaq 100 futures fell more than 6.5% during Asian trading in the morning, while S&P 500 and Euro Stoxx 50 futures dropped by 3%.

By 11:00, Nasdaq futures had recovered some losses but still showed a 4% decline. A 4% drop in the Nasdaq 100 index during the session brought it close to a key support level: the 200-day moving average. This level has not been breached since March 2023.

By 14:10, Nasdaq futures were down about 4.5%. By 15:40, S&P 500 futures had fallen by 4.6%, Nasdaq 100 by 6.2%, Russell 2000 by 5.6%, and Bitcoin by 15%, marking its biggest drop since November 2022.

By 17:25, the S&P 500 index had fallen nearly 10% from its all-time high reached on July 16. The index has now dropped by about 8.6% from that level.

The Nasdaq 100 index went into correction last week and continues to fall. It has now lost about 14% from its all-time high.

At the close of trading in the US, the S&P 500 index ended up down 3%, the biggest one-day drop since September 2022. The Nasdaq 100 index closed down 3%, losing $907 billion in market value, while the Russell 2000 fell by 3.3%.

The VIX volatility index, which measures market volatility, rose by 48%. Such levels have not been seen since June 2020.

Situation in European markets:

The decline continues in European markets, although it is less severe than in Asia. By Monday morning, the Stoxx Europe 600 had fallen by 2%, and the FTSE 100 index by about the same amount.

The Stoxx Tech index fell nearly 5% to its lowest level in six months.

Cyclical sectors such as banks, energy companies, and mining companies also show significant losses. More resilient were indices of consumer goods and food companies.

According to the Financial Times, the yield on two-year German bonds reached a 17-month low, falling to 2.2%, amid fears of a possible US recession spreading to European markets.

By 14:10, European stocks had suffered less significant losses, although key indices had fallen by more than 2%. Stoxx Europe 600 lost 2.7%, the British FTSE 100 by 2.68%, the French CAC 40 by 2.3%, and the German DAX by 2.6%.

Traders' forecasts for key bank rates:

Traders are increasing bets that central banks worldwide may be forced to take action. At one point, the probability of an emergency rate cut by the US Federal Reserve was estimated at 60%.

Reasons for the financial market crash:

Concerns in global markets have been triggered by a weak July employment report in the US, which showed an unemployment rate rising to a nearly three-year high of 4.3% amid a significant slowdown in hiring, raising fears of a worsening labor market situation.

This prompted Wall Street analysts to predict an increased likelihood that the United States, the world's largest economy, would enter a recession.

The recent decline followed a sharp rise in stock markets worldwide in the first half of this year, which led to several record highs.