US open: Stocks sharply lower amid recession fears

dl wall street new york city wall st nyc new york stock exchange nyse nasdaq us usa united states of america trading finance unsplash — Sharecast / Roberto Junior via Unsplash

Wall Street stocks were firmly in the red early on Monday amid fears that a potential US recession may be on the horizon.

As of 1530 BST, the Dow Jones Industrial Average was down 2.24% at 38,845.54, while the S&P 500 lost 2.79% to 5,197.35 and the Nasdaq Composite came out the gate 3.51% weaker at 16,187.90.

The Dow opened 891.72 points lower on Monday, more than doubling losses recorded in the previous session as market participants began to grow concerned that the Federal Reserve Bank may be moving too slow when it comes to interest rate cuts if it wants to avoid a recession.

Stocks tanked globally on Friday, while Japan's Nikkei 225 closed more than 12% lower on Monday in its worst daily showing since 1987's Black Monday crash on Wall Street.

Recessionary fears were the main reason for losses following worse-than-expected July nonfarm payrolls numbers from the Labor Department that fuelled fears that US central bank was behind the eightball when it comes to cutting interest rates to bolster an economic slowdown just a week after opting to keep its benchmark rate at the highest levels seen in 20 years.

The yield on the benchmark ten-year Treasury note was down early on Friday and sitting at 3.676% - on track for its lowest close in more than a year.

Tech losses were also in focus as Nvidia, Apple, Tesla and Broadcom were all sharply lower amid an ongoing rotation out of the sector. Elsewhere in the corporate space, BioNTech fell short of earnings expectations amid a slide in Covid vaccine sales, while Carlyle Group also posted an unexpected quarterly earnings drop.

On the macro front, S&P Global's composite PMI was revised lower to 54.3 in July, down from a preliminary reading of 55 and June's 54.8 print, while its services PMI was downwardly revised to 55 from a preliminary reading of 56, up from the prior month's 55.3 print.

On another note, the Institute for Supply Management's services rose to 51.4 in July, up from the four-yearly low of 48.8 seen in June and above market expectations for a reading of 51.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

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