The market turmoil was driven by declines in major tech stocks like Nvidia, Apple and Amazon, along with a disappointing jobs report|Sten Tamkiv|CC BY-NC-SA 2.0
Japan’s Nikkei 225 index rebounded on Tuesday after plunging over 12% on Monday, which was its sharpest drop since 1987. Wall Street and other global markets in Asia and Europe were also in turmoil yesterday.
Dow Jones dropped over 1,000 points, the Nasdaq fell 3.5% and the broader market dropped 3%. The volatility index (VIX) spiked to its highest level since March 2020, reflecting heightened investor anxiety.
The market plunge followed declines in major tech stocks like Nvidia, Apple and Amazon, along with a disappointing US jobs report.
Apple fell over 5% while Nvidia lost more than $420 billion in market value over four days. Bitcoin’s price also fell more than 15%.
Confidence was high earlier in the year as central banks seemed to control inflation, supported by a robust US economy and advancements in artificial intelligence.
However, recent weak economic reports, including sluggish job, manufacturing and construction data, have shaken that confidence. America’s unemployment rate unexpectedly jumped to 4.3%, with only 114,000 new jobs added in July, while the manufacturing index fell to 48.3, below the 50-point threshold indicating contraction.
Criticism has mounted against the Federal Reserve for delaying rate cuts.
Despite the turmoil, experts advise against panic selling and suggest ensuring diversified investments, emphasizing that market sell-offs are normal.