U.S. stocks were sharply lower late Monday morning, though well off early-session lows, amid a global equities selloff as concerns the health of the U.S. economy intensify.
The Nasdaq Composite was down 2.7%, while the S&P 500 and Dow Jones Industrial Average were off 2.5% and 2.2%, respectively. 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.
Shares of AI investor darling Nvidia (NVDA) were down 6% after falling more than 15% early in the session, while other large chip stocks, including Intel (INTC), Arm Holdings (ARM), Micron (MU) and Super Micro Computer (SMCI) also fell sharply.
Stocks of large banks, including Bank of America (BAC), JPMorgan Chase (JPM) and Citigroup (C), were also losing ground amid the concerns the economy and how a downturn would affect consumer finances.
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 36 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 an 87% 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.
