Losses Grow as Traders Seek Help from the Fed – Europe Market Wrap
Global stock markets fell, with losses cascading across tech stocks, Nasdaq 100 Index futures plummeting more than 4%, and Japanese equities falling by the largest in more than ten years.
As concerns about a US economic downturn grew, traders increased their bets that the Fed would intervene with an emergency interest rate decrease, placing the odds at 30% for a quarter-point reduction. The Dollar plummeted, and the 10-year Treasury yield dropped to its lowest level in a year. The CBOE Volatility Index surged to its highest level since 2020.
Nvidia, Apple, and Tesla all dropped more than 7% in premarket trade. Berkshire Hathaway said on Saturday that it had cut its stock in Apple by nearly half as part of a huge second-quarter selling frenzy. Chipmakers like Intel and Advanced Micro Devices also fell.
Markets are extending their decline from last week, when a dismal US jobs report fuelled concerns that the Fed isn’t moving fast enough to prevent a dramatic economic catastrophe. The wave of selling reached a fever pitch in Japan as traders rushed to unwind popular carry strategies, propelling the Yen 3% higher and leading the Topix stock index to fall 12%, closing the day with the largest three-day collapse in data dating back to 1959.
