From Morningstar: 2024-08-05 12:37:00

Global markets nosedived due to fears of a US recession, the end of the tech boom, and the yen’s surge. Stocks plummeted on Monday, following a 12% drop in Japan’s Nikkei index. US indices fell 3%, with the UK’s FTSE 100 and Germany’s Dax down 2%.

July’s poor US jobs numbers sparked concern of a recession, with the Morningstar Global Markets Index dropping 2% on Friday alone. Economists fear a recession as US data continues to disappoint. The Federal Reserve may cut rates sooner than expected to stabilize the US economy.

Currency movements play a significant role in market turmoil, with a weakening dollar and strengthening yen impacting global markets. Traders are closing derivative positions, causing further panic. The market volatility resembles levels seen during the 2020 pandemic sell-off.

Market experts advise not to panic, as previous sell-offs presented buying opportunities. The fall in tech stocks, like Nvidia, which saw a 4% drop, could be a chance for long-term investors to buy undervalued assets. Japanese markets also face challenges but may rebound for domestic-focused stocks.



Read more at Morningstar: Global Market Turmoil: What We Know So Far