U.S. stocks plunged Monday morning amid a global equities selloff, led by another sharp decline for technology stocks as concerns the health of the U.S. economy intensify.
The Nasdaq Composite was down 3.5%, while the S&P 500 and Dow Jones Industrial Average were off 3% and 2.5%, respectively, recovering from much steeper losses earlier in the session. Monday's selloff follows a 12% decline for Japan's Nikkei index overnight and extends a multi-week slide for U.S. stocks that accelerated on Friday with the release of a July jobs report that came in far worse than expected.
The VIX, a measure of expected market volatility sometimes referred to as the "fear index," jumped more than 40 points to 65 in early Monday, hitting levels not seen since March 2020, at the onset of the Covid-19 pandemic. The index was at 42 recently.
The yield on the 10-year Treasury fell to below 3.7%, its lowest level in more than a year, as expectations grow that the Federal Reserve will have to cut rates aggressively in response to recent data that indicate the economy is weakening more than previously thought.
Traders are now pricing in a 99% likelihood that the Fed will cut its benchmark rate by half a percentage point at its September policy meeting, according to the CME Group's FedWatch tool, which forecasts interest rate movements based on fed funds futures trading data. That's up from 11% a week ago.
Amid the risk-off moves on Monday, the price of bitcoin dipped below $50,000 for the first time since February, though was trading around $54,000 recently.
