(Reuters) – U.S. stock index futures fell sharply, with Nasdaq-linked futures down about 4 percent, on fears that the United States is entering a recession that of traction in global markets.
Stock markets in Asia and Europe posted sharp losses and government bond yields also fell, with investors flocking to safe-haven assets and betting that the US Federal Reserve needed to act quickly. to cut interest rates to stimulate growth.
All megacap stocks, which during the year pushed the indices to reach historic highs, fell sharply in the premarket.
Apple (NASDAQ: , which became too high.
Nvidia fell 10.0% after reports that there will be a delay in the launch of its next artificial intelligence chips due to design flaws.
At around 11.40 am, the futures on decreased by 611 points, equivalent to 1.53%, the futures on lost 129.75 points, equivalent to 2.41%, and the futures on saw a decrease of 723, 5 points, equivalent to 3.9 %.
Weak jobs data and a contraction in manufacturing activity in the world’s largest economy, along with negative forecasts from Big Tech, pushed the Nasdaq 100 and the US into a sharp correction last week.
The latest US job market numbers also triggered the so-called “Sahmrule”, considered by many to be an historically accurate recession indicator.
The data prompted traders to price in a 91.5% chance the US central bank will cut key rates by 50 basis points at its September meeting and see year-end rates at 4-4.25 % from the current 5.25%-5.50%, according to the CME FedWatch tool.
Big Wall Street brokers also revised their Fed rate projections for 2024, expecting more central bank policy easing.
“I’m reluctant to believe that the Fed will start the easing process with a 50 basis point cut, but if the next seven weeks’ data is consistent with this week’s data, the Fed should be aggressive,” said Ronald Temple, chief market strategist. at Lazard.
Over the course of the week, several Fed officials will give speeches on the economy and monetary policy, and any indication that they will cut interest rates could help calm investor anxiety.
Chicago Fed president Austan Goolsbee’s speech is scheduled for 2:30 p.m., while San Francisco Fed president Mary Daly’s speech is expected after markets close.
Futures on the index of small-cap companies fell 3.5%.
The CBOE volatility index, also known as Wall Street’s “fear indicator,” surpassed its long-term average level by 20 points last week and is currently at 35.19, the highest since May 2022.
Stocks linked to cryptocurrencies also fell after hitting five-month lows. Coinbase (NASDAQ: ) Global fell 12.5%, US-listed Bitfarms shares fell 12.4%, Microstrategy fell 15.1% and Riot Platforms (NASDAQ: ) fell 12.8%.
(Translated by Chiara Scarciglia, edited by Andrea Mandalà)