Stocks Smashed as Recession Fears Mount – Nasdaq Down 4%
US stocks tumbled in trading yesterday as recession fears grew for the world’s largest economy, driven by heightened geopolitical risks. The Dow fell by 2.08%, the S&P 500 dropped 2.70%, while the tech-heavy Nasdaq plunged by a hefty 4%. Bonds rallied, with yields taking a significant hit on the day—the 2-year yield falling 11.3 basis points to 3.883%, while the benchmark 10-year yield declined by 8.8 basis points to 4.213%. The dollar edged slightly higher but saw some weakness, with the DXY rising just 0.06% to 103.90. A similar trend was seen in oil prices, which surrendered most of their recent gains amid growing concerns over economic growth—Brent crude fell 1.62% to $69.22, while WTI dropped 1.51% to $66.03. Gold prices also pulled back, declining 0.75% to close near support levels at $2,887.56.
Investors Fear the “R” Word Could Spread More Panic
Just a week ago, even mentioning the “R” word may have been met with scepticism among investors in the US, but now market commentators are openly discussing ‘recession fears’ as stock indices continue to plunge. The ‘buy the dip’ mentality that proved so effective for investors last year may be severely tested in the coming months, particularly as uncertainty over government policy persists. Inflationary concerns that initially accompanied the new government have taken a backseat, with the primary focus now on global economic growth and its impact on financial markets. There are growing fears that the ongoing correction in US markets could be deep and prolonged.
Volatile Markets Ahead Despite a Quiet Calendar
Traders are bracing for another turbulent session today as Wall Street’s rough start to the week looks set to extend into the Asian trading session. While today’s economic calendar is relatively light until the US session, market sentiment remains fragile. Typically, this would suggest a quieter, more range-bound trading day, but increasing concerns over tariffs and their potential impact on global growth could spark further volatility. With little scheduled to interrupt the current momentum, both Asian and European markets could experience heightened fluctuations.
The US will release the JOLTS Job Openings data later today, which usually coincides with other major employment figures. While this may prompt some reflection among traders, geopolitical concerns are expected to dominate market sentiment—at least until tomorrow’s key CPI release.
