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sell-off in markets around the world turned into a rout on Monday as investors grew panicky about signs of a slowing American economy, with stocks tumbling across Asia and Europe.
The moves were a sharp reversal in the world’s major markets, which for much of the past year have risen to new heights, propelled by optimism about cooling inflation, solid labor markets and the promise of artificial intelligence technology.
The declines were especially pronounced in Japan, where fears about the economy added to other concerns about the damage a strengthening yen could do to corporate profits.
The Nikkei 225 index fell 12.4 percent. It was the benchmark index’s biggest one-day point decline, larger than the plunge during the Black Monday stock market crash in October 1987. The Topix index, which includes companies that represent a broad swath of Japan’s economy, fell 12.2 percent.
The unease spread to Europe, where the Pan-European Stoxx index fell more than 2 percent in early trading, with every major market on the continent recording declines.
The losses were set to continue in the United States. Stock futures for the S&P 500 were down more than 2 percent, and those for the Nasdaq fell more than 4 percent.
The drops followed a
U.S. jobs report on Friday that indicated that employers had slowed hiring significantly in July, with unemployment rising to its highest level in nearly three years. This deepened fears that the world’s largest economy was cooling and that the Federal Reserve may have waited too long on cutting interest rates.
Based on the weakness in the jobs report, Goldman Sachs said in a note that it now expected the
Federal Reserve to cut interest rates at its next three meetings — a more aggressive timetable for cuts than the investment bank had previously expected.
South Korea’s benchmark Kospi index fell more than 10 percent at one point. Equity markets in Taiwan, Singapore, Australia, Hong Kong and mainland China were all lower. Stocks in India, one of the best-performing markets in Asia this year, traded more than 2 percent lower.
Technology shares were hit particularly hard. The chip giants Samsung Electronics and Taiwan Semiconductor Manufacturing Company each fell 10 percent in Asia. European semiconductor players like ASML of the Netherlands and STMicroelectronics of Switzerland also fell. Futures for Nvidia and Intel, which are listed in New York, were lower.
