Stock Market Today: Stocks are in meltdown as Fed causes worldwide crisis 2024 news
Following Asia’s largest selloff since 1987, stock market are bracing for a tech-driven repeat of Black Monday
Fear Spike
CBOE Group’s VIX index, Wall Street’s go-to volatility measure, is surging higher in early Chicago trade, up roughly 170% and surpassing $50 for the first time in four years.
This implies that traders anticipate daily movements of roughly 3.12% for the S&P 500 during the next month.
$VIX This is wild. This is 10 year chart of volatility. A move to 50 was not on my bingo card. See that in comparison to covid spike. pic.twitter.com/3Bhn5WNyOd
— JaguarAnalytics (@JaguarAnalytics) August 5, 2024
Stock Market Today
Japan’s stocks were wiped out Friday night, with the Nikkei 225 plunging 12.4%, the worst single-day decrease since the Black Monday crash of 1987, when investors ditched risky investments and rushed to safe-haven assets.
JUST IN 🚨: Japanese Stocks suffer largest decline since Black Monday 1987 pic.twitter.com/XbURmJOxhI
— Barchart (@Barchart) August 5, 2024
Benchmark 10-year Treasury note rates reached a mid-2023 high of 3.723% in overnight trade and were last recorded 5 basis points down than their Friday finish of 3.741% heading into the New York session.
Meanwhile, Wall Street’s fear gauge soared more than 125% in after-hours trading, reaching its greatest level since the pandemic’s inception, with the CBOE Group’s VIX index closing at $41.89.
That level means that traders expect the S&P 500 to change by about 115 points per day for the next 30 days, more than double the volatility priced into markets in early July.
“It feels like the perfect storm triggered by the Fed rate decision last week followed by a US jobs report that recalibrated the market’s assessment of a recession,” according to strategists at Saxo Bank. “This was the catalyst. The rest are risk-driven mechanical trading decisions.
The U.S. oil-pricing benchmark, WTI futures, which are closely related to domestic gasoline prices, fell $1.31 to $72.21 per barrel for September delivery.
Last week, the Fed held its benchmark lending rate constant at between 5.25% and 5.5%, refusing to commit to a September rate reduction. The decision came only days before a weaker-than-expected estimate for July industrial activity and poorer labor-market statistics, including the highest jobless rate in four years.
The longest yield curve inversion in history (758 days) is close to ending today w/ the 10-year Treasury yield now only 0.08% lower than the 2-Year Treasury yield. Historically, the flip back to a positive sloping curve after a long inversion has occurred near a recession. pic.twitter.com/pfqJzAuu0h
— Charlie Bilello (@charliebilello) August 4, 2024
Markets were also on edge due to growing military concerns in the Middle East. U.S. authorities are pushing Americans to leave Lebanon, and Israel is ready for a possible retaliation from Iran and Hezbollah following the assassination of a senior Hamas leader in Tehran last week.
On Wall Street, tech companies appear to bear the brunt of the projected selloff, with Nasdaq futures contracts indicating a 770-point drop at the start of trade.
Futures for the S&P 500 are set for a 140-point decrease, while the Dow Jones Industrial Average is expected to fall 690 points to begin the week.
Apple (AAPL) shares fell 8.44% to $201.30 in premarket trading following revelations over the weekend that billionaire investor Warren Buffett sold nearly half of his stock in the tech giant last quarter.
