On Monday, the main indexes on Wall Street dropped as risk appetite among investors fell on fears of a U.S. recession after last week’s weak economic data, sending tremors across markets globally.
As the day progressed, market worries eased slightly, and stocks trimmed losses after data indicated July’s services sector activity in the U.S. rebounded from a 4-year low amid a rise in employment and orders.
Traders ascribed some stock weakness to the unwinding of sharp carry trade positions, where investors borrow money from low-interest rate economies like Japan and Switzerland to fund their bets in high-yielding assets.
The Magnificent Seven group of stocks – a major driver for the indexes reaching record peaks this year – were on track to lose a total of $650B in market value.
apple declined 3.9% after Berkshire Hathaway halved its stake in the firm, in an indication that Warren Buffett was getting wary about lofty stock market valuations or the wider U.S. economy.
Alphabet and Microsoft fell about 3% each, while Nvidia slid 6.1%.
The NASDAQ Composite was down 465.25 points, or 2.77%, at 16,310.92, the S&P 500 was down 129.55 points, or 2.42%, at 5,217.01, and the dow jones Industrial Average was down 863.70 points, or 2.17%, at 38,873.56.
