Dow Jones falls more than 1,000 points as global stock selloff deepens on recession fears

• The stock market crashed on Monday, with the Nasdaq 100 index falling almost 6%.

• The decline began last week after weak earnings reports and a weak jobs report in July.

• An unexpected interest rate hike in Japan and a reduction in Berkshire Hathaway’s stake in Apple have raised investor concerns.

U.S. stocks crashed on Monday, with the Nasdaq losing nearly 6% as the global market panic that began late last week accelerated.

The Nasdaq Composite Index fell sharply and the Dow Jones Industrial Average lost more than 1,000 points in Monday morning trading, with the tech-heavy index sinking into a correction.

The stock market plunge began last week after disappointing earnings reports from Amazon and Intel and a large drop in nonfarm payrolls in July raised fears of a recession.

The S&P 500 is down about 7% since Thursday, while the Nasdaq 100 is down 9%.

Losses accelerated on Monday after the Japanese stock market suffered its biggest decline since Black Monday in 1987, falling 12%.

A surprise 15 basis point rate hike by the Bank of Japan last week led to an exit from the wildly popular yen carry trade, helping to accelerate recent stock market declines.

All of these factors, combined with concerns that the Federal Reserve squandered an opportunity to cut interest rates at last week’s meeting, have heightened investor fears that an economic recession is near.

“Markets are clearly nervous about the divergent paths that central banks are taking, which is leading to a lot of volatility,” Jamie Cox, managing partner of Harris Financial Group, said Monday. “Add to that the potential for escalation in hostility in the Middle East and a presidential election cycle full of madness, and things are looking pretty negative.”

Other issues on the radar this week included Berkshire Hathaway’s second-quarter earnings report, which revealed Warren Buffett’s conglomerate had reduced its massive stake in Apple by about 50%.

Berkshire Hathaway now holds a record $277 billion in cash, raising concerns among some investors that Buffett has lost interest in the stock market.

In another sign of the risk aversion prevailing in the markets, bitcoin has fallen 19% since Friday to below $50,000.

“At some point, buyers will come back to take advantage of the ‘cuts’ in prices,” said FCA senior market analyst David Morrison. “But there is no sign that the major indices have stabilised. The bigger question is whether this bloodbath will be enough to provide the basis for a renewed rally and, ultimately, new record highs. The alternative is that the peak has already been reached and investors will need to adjust their outlook and strategies accordingly.”

The story continues

Here’s how the US indices looked like right after the opening of the session on Monday at 9:30:

Here’s what else is happening today:

For commodities, bonds and cryptocurrencies:

• West Texas Intermediate crude fell 0.97% to $72.81 a barrel. Brent crude, the international benchmark, fell 0.90% to $76.12 a barrel.

• Gold fell 1.51% to $2,432.40 an ounce.

• The yield on the 10-year Treasury bond fell 9 basis points to 3.70%.

• Bitcoin fell 14.2% to $49,846.

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