Key points:
US stock indices climbed in an attempt to recover from the steep losses seen at the beginning of the week as fears of a US recession mounted.
The Dow Jones Industrial Average (Symbol: DJ30), S&P 500 (Symbol: SP500) and Nasdaq Composite (Symbol: NAS100) had tumbled in regular trading on Monday, experiencing their worst sessions since September 2022.
Picture: The US stock market rebounded near a session high, as observed on the VT Markets app.
The Dow Jones fell 2.6%, while the S&P 500 dropped 3%. The tech-heavy Nasdaq Composite plunged 3.43%, driven by substantial declines in major technology stocks. Nvidia, a key player in this year’s rally, dropped 6.4%. Other notable tech giants like Microsoft and Tesla fell 3.3% and 4.2%, respectively. Apple saw a significant decline of 4.8% after Warren Buffett’s Berkshire Hathaway announced it had halved its stake in the iPhone maker.
Outside the US, there is a sharp decline in the Japanese stock market, marking the worst performance since Wall Street’s Black Monday in 1987, and the rapid unwinding of the yen “carry trade” also played a role in the heightened volatility.
This global market turbulence added to the already mounting concerns about a potential US recession, influencing investor sentiment worldwide.
The rebound in the US stock market indicates potential for short-term gains, particularly if the positive sentiment holds.
However, the underlying fears of a US recession and global market instability suggest that volatility will remain high.
The CBOE Volatility Index (VIX) had spiked to a peak of 65.73 on Monday, reaching levels last seen during the COVID-19 pandemic.
