U.S. stocks plunged on Monday morning as fears of an economic recession have elevated.
The decline follows a report highlighting rising unemployment and slowing job growth.
The Dow Jones Industrial Average dropped 1,072 points, or 2.7 percent, The Epoch Times reported. The plunge followed a 611-point loss on August 2.
The Nasdaq Composite fell 6.3 percent shortly after the opening bell.
Japanese stocks have also plunged to the greatest degree since 1987’s Black Monday. The Nikkei 225 dropped 12.40 percent, losing 4,451 points, the outlet added.
Kyle Rodda, a senior financial market analyst with Capital.com, said, “The markets are in meltdown and it’s a sea of red across the world. The rapid move in the yen is putting downward pressure on Japanese equities, but it’s also driving an unwind of a major carry trade – investors had leveraged up by borrowing in yen to buy other assets, chiefly U.S. tech stocks.”
“We are basically seeing a mass deleveraging as investors sell assets to fund their losses. The rapidity of the move has caught a lot of investors off guard,” Rodda explained, adding that “there’s a lot of panic selling now, which is what causes these non-linear reactions in asset prices to pretty straightforward fundamental dynamics.”
Donald Trump responded to the plunging markets in a post on Truth Social, writing, “STOCK MARKETS CRASHING. I TOLD YOU SO!!! KAMALA DOESN’T HAVE A CLUE. BIDEN IS SOUND ASLEEP. ALL CAUSED BY INEPT U.S. LEADERSHIP!”
JP Morgan estimated that the odds of a U.S. recession are 50%.
“Now that the Fed looks to be materially behind the curve, we expect a 50bp cut at the September meeting, followed by another 50bp cut in November,” JPMorgan economists said. “Indeed, a case could be made for an inter-meeting easing, especially if the data soften further—although Fed officials might worry about how such a move could be (mis)interpreted.”
