At 3:45pm, the broad S&P 500 index was down 3.5 percent to 5,162, while the Dow Jones industrial index had fallen 2.7 percent to 38,668. The tech-heavy Nasdaq Composite recorded a decline of 4.4 percent, to the level of 16,031.
On Friday, the S&P 500 fell 1.8 percent, while the Nasdaq dropped 2.4 percent and the Dow Jones industrial index lost 1.5 percent.
These declines came in the wake of the US job report on Friday, which raised concerns about a global economic slowdown. The discussion around the Fed has now shifted to whether interest rates should be cut by 25 or 50 basis points at the September meeting, with some analysts even talking about a mid-meeting cut.
“The Fed must start easing monetary policy more aggressively than previously anticipated to avoid a recession in the world’s largest economy,” wrote Nigel Green, CEO of DeVere Group, in a market update.
He wants to see a 25 basis point cut as early as this week.
“The Fed was behind the curve at the beginning of the cycle and cannot afford to fall behind this time as well,” he wrote.
During the morning, pricing indicated a probability of up to 60 percent that the Fed would act outside its regular meeting schedule, although that number has come down slightly during the day.
In trading, tech stocks in particular have been affected by the downturn – after performing strongly earlier this year, the Nasdaq composite index is nearing correction territory. Nvidia was down 9.2 percent at the open.
Analysis:
The global stock market has experienced significant declines, driven by concerns about a potential economic slowdown. Investors are closely watching the Federal Reserve’s upcoming meeting to see if interest rates will be cut in an effort to stimulate the economy. Tech stocks, which had been performing well, have been hit hard by the recent downturn. It is important for investors to stay informed and make strategic decisions to protect their finances during these uncertain times.