(Reuters) – The New York Stock Exchange ended sharply lower on Monday as fears of a U.S. recession rattled markets and prompted investors to shy away from risky assets, while Apple fell after Berkshire Hathaway reduced its stake in the company.
The Dow Jones index fell 2.62%, or 1,041.36 points, to 38,695.90 points, its lowest since June 14.
The broader S&P 500 fell 163.63 points, or 3.06%, to 5,182.93, hitting its lowest level since May 6.
The Nasdaq Composite fell by 587.87 points (-3.50%) to 6,188.30 points, its lowest since May 3.
All three indices recorded their largest three-day percentage declines since June 2022.
Weak U.S. economic data last week, including a much weaker-than-expected employment report in July, triggered a broad risk-off move. However, indices pared losses late in the morning after data showed that U.S. service sector activity rebounded in July.
Chicago Fed President Austan Goolsbee’s dovish remarks, which dismissed the prospect of a recession, also limited the rally in bonds and losses in stocks during the session. But he said Fed officials needed to be aware of the changing environment to avoid being too restrictive with interest rates.
“Today we are seeing a sell-off as a continuation of the anxiety felt last week,” said Neville Javeri, portfolio manager and head of the Empiric LT Equity team at Allspring in Washington.
“It started with the jobs data last week, which clearly led to the belief that the Fed needs to start being more proactive about where the unemployment numbers are going,” he added.
US jobs data and slowing manufacturing activity have added to concerns over recent disappointing forecasts from major US technology companies, with the Nasdaq Composite confirming on Friday that it is in correction territory.
The market now anticipates a 92.5% probability that the U.S. Federal Reserve will cut its benchmark rates by 50 basis points in September, up from an 11% probability last week, according to CME’s FedWatch tool.
In terms of values, Apple lost 4.82% after Berkshire Hathaway halved its stake in the iPhone maker. Among other tech giants, Nvidia lost 6.36%, Microsoft 3.27% and Alphabet (which was also found guilty on Monday of abuse of a dominant position) lost 5.54%.
On the other hand, Kellanova (ex-Kellogg) jumped 16.23% after a Reuters report that Mars was studying a possible acquisition of the company.
( Kate Entringer)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
