Alert – Nasdaq and S&P suffer the biggest plunge in two years – one AI company sees biggest ever loss in market value – News Alerts

Nearly everything on Wall Street is tumbling Monday as fear about a slowing US economy worsens and sets off another sell-off for financial markets around the world.

The S&P 500 was down by 4 percent in early trading, coming off its worst week in more than three months. The Nasdaq was down 6 percent to pull it 15 percent below its record set last month.

JPMorgan, the world’s biggest bank, now says the chances of a recession are at 50 percent.

12:24

Fears US is heading for recession triggers global stock market plunge with Japan's Nikkei experiencing worst sell-off since 'Black Monday

Stock markets around the globe have continued to plunge on Monday amid fears the US economy may be on track for a recession as Japan suffered its worst sell-off since ‘Black Monday’ in 1987.

Experts at investment bank Goldman Sachs said they now believed there was a staggering 25 per cent chance of a recession in the US – up ten percent from their previous estimate of 15 per cent, while JP Morgan put the chances of a recession at 50 per cent.

US stock index futures tumbled on Monday, with those tied to the Nasdaq falling nearly 4 per cent, but traders are now ramping up bets that the Federal Reserve will announce an emergency interest rate cut in response to the global stock market crash and to avoid a huge recession.

FILE PHOTO: A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 7, 2024. REUTERS/Brendan McDermid/File Photo/File Photo

14:01

Major bank stocks fall into the red

Wells Fargo and Goldman Sachs both fell more than 5 percent in the first hour of trading.

Bank of America dipped 4.5 percent, and J.P. Morgan Chase traded around 3 percent lower on Monday morning.

14:00

Stock trading platforms reported as down

Downdetector, which monitors when apps and websites are not working, reported issues with several of the the most popular trading platforms.

Those affected included Robinhood, E-Trade, Fidelity, Ameritrade and Charles Schwab.

13:45

Magnificent Seven takes biggest hit on record

The group – consisting of Nvidia,Tesla, Amazon, Meta, Alphabet (Google), Microsoft and Apple – opened 9 percent lower collectively, according to Bloomberg analysis.

This is the worst day-on-day drop for the companies since market data began grouping them in 2015.

Nvidia dropped a huge 14 percent at the start of market trading in New York.

The dip wiped off around $360 billion in market value, making it potentially the biggest one day drop for a company in stock market history.

Apple slid 8 percent after Warren Buffett’s Berkshire Hathaway halved its stake in the technology giant.

NEW YORK, NEW YORK - AUGUST 02: Stock market numbers are displayed on a screen at the New York Stock Exchange during afternoon trading on August 02, 2024 in New York City. Stocks closed low after the July jobs report showed a slow down in the labor market, with the Dow Jones closing with a loss of over 600 points after being nearly down 1000 points and Nasdaq closing at a loss of over 400 points. (Photo by Michael M. Santiago/Getty Images)

13:35

Almost all stocks were red at the market open in New York – and Nasdaq index down a huge 6 percent

The S&P 500 opened lower by 195.42 points, or 3.66 percent, at 5,151.14.

The tech-heavy Nasdaq dropped 1,063.63 points, or 6.34 percent, to 15,712.53 at the opening bell.

It means both are down the most in nearly two years.

The Dow Jones Industrial Average fell 681.07 points, or 1.71 percent, at the open to 39,056.19.

All will hit American’s retirement savings, with 401(K)s heavily invested in the main indices.

13:29

US investors are bracing for the stock market to open at 9.30am New York time – with fears the sell-off will intensify as 'fear gauge' sees biggest daily jump

Wall Street’s most watched gauge of investor anxiety logged its largest ever intraday jump on Monday, as US stock futures tumbled on rising fears the United States could be tipping into recession.

The CBOE Volatility Index jumped to a high of 65.73, up about 42 points from its close on Friday, as Wall Street looked set to continue the global stock rout that saw Japanese shares at one point exceed their 1987 “Black Monday” loss.

The VIX was last up 34 points at 57.15, its highest since March 2020.

‘It seems like a liquidity crisis … this is very, very unusual,’ said Joe Tigay, portfolio manager for Rational Equity Armor Fund.

13:17

Fears of a trading circuit breaker rise as stocks set to tumble

A circuit breaker is a temporary pause in trading if stock market indices drop too far.

If the S&P 500 drops 7 percent on the last trading day’s close there will be a 15 minute pause in trading.

If there is then a 13 percent drop before 3:25 pm there will be a second 15 minute pause.

If the index drops by 20 percent markets will close for the day.

Circuit breakers are common for individual stocks, but extremely rare for the main indices.

The last time they were seen for the likes of the S&P 500 was during the early stages of the pandemic.

NEW YORK, NEW YORK - AUGUST 02: Traders work on the floor of the New York Stock Exchange during afternoon trading on August 02, 2024 in New York City. Stocks closed low after the July jobs report showed a slow down in the labor market, with the Dow Jones closing with a loss of over 600 points after being nearly down 1000 points and Nasdaq closing at a loss of over 400 points. (Photo by Michael M. Santiago/Getty Images)

13:09

AI darling on track for biggest ever loss in value in a day

Shares of Nvidia are down 14 percent in premarket trading – ahead of the stock market opening at 9.30am New York time.

That will wipe off almost $360 billion in market cap from the AI stock darling.

That would be the biggest destruction in market value in ever.

The stock has soared in value this year amid hype about artificial intelligence.

12:56

US stocks are plunging in pre-market trading -with the S&P 500, the benchmark US index, set for biggest opening drop in four years

S&P 500 futures are down 3.1 percent and Nasdaq futures are sinking 4.7 percent.

Investors are fleeing the Big Tech names that until recently had powered the U.S. market higher: Apple fell more than 7 percent and Meta was down 6 percent in premarket trading. Chipmaker Nvidia tumbled 12.5 percent.

The losses in the Magnificent Seven stocks were set to wipe out nearly $1 trillion from the combined market value of the companies.

After driving gains on Wall Street for more than a year, big technology stocks have come under pressure in the past few weeks also on signs that the payoff from hefty AI investments would take longer than some investors had initially hoped.

Shares of Amazon, Microsoft and Alphabet – the three biggest providers of cloud-computing services – fell as their earnings reports dashed big bets of hefty AI investments translating quickly into growth.

12:24

Top economist issues dire warning about the US economy as he tears into the Fed for huge 'policy blunder' that could send country spiraling into RECESSION: 'I really do worry'

A leading economist has issued a dire warning about the US economy – tearing into the Federal Reserve for a ‘policy blunder’ that could send the country into recession.

Mohamed El-Erian, the chief economic advisor at Allianz, said on Sunday he fears the economy may be spiraling following a dismal unemployment report last week.

He places the blame on the Fed for keeping its main interest rate at a two-decade high since 2022 in its zeal to stifle inflation.