Stocks experienced a significant downturn on Monday, continuing the trend seen at the end of last week. The major indices all posted notable declines, with the Nasdaq and the S&P 500 reaching three-month lows.
Despite ending slightly above their session lows, the major averages closed firmly in negative territory. The Nasdaq dropped 576.08 points, or 3.4%, to 16,200.08; the S&P 500 fell 160.23 points, or 3.0%, to 5,186.33; and the Dow decreased by 1,033.99 points, or 2.6%, to 38,703.27.
This ongoing weakness on Wall Street followed a significant sell-off in overseas markets, with Japan's Nikkei 225 Index experiencing its sharpest decline since "Black Monday" in October 1987.
Fears of the U.S. economy entering a recession, exacerbated by last Friday's disappointing jobs report, triggered the considerable weakness in global markets.
Nvidia (NVDA), a leading player in the AI sector, saw its shares dive by 6.4% due to a reversal in the artificial intelligence trade that had recently propelled markets to record highs.
Apple (AAPL) also saw a drop of 4.8% after Warren Buffett's Berkshire Hathaway disclosed it had sold nearly half its stake in the tech giant.
Some recovery was seen following the release of a report from the Institute for Supply Management, indicating an uptick in U.S. service sector activity in July. The ISM's services PMI rose to 51.4 in July, up from 48.8 in June, with a reading above 50 signaling growth. Economists had predicted a rise to 51.0.
"The increase in the ISM services index may not fully soothe recession fears stoked by Friday's employment report, but it supports our view of an economy in transition rather than on the verge of collapse," said Matthew Martin, U.S. Economist at Oxford Economics.
He further commented, "Expectations for aggressive rate cuts in September are overblown; we anticipate the Fed will proceed with a 25 basis point cut at the meeting."
### Sector News
### Telecom stocks tumbled significantly, pulling the NYSE Arca North American Telecom Index down by 4.2%.
### Airline stocks also saw substantial weakness, evidenced by a 4.1% drop in the NYSE Arca Airline Index.
### Networking stocks experienced notable declines, with the NYSE Arca Networking Index plunging by 3.8%.
### Tobacco, oil service, and computer hardware stocks also moved notably lower amid widespread selling pressure on Wall Street.
### Other Markets
In overseas markets, Asia-Pacific stocks fell sharply on Monday. Japan's Nikkei 225 Index plunged by 12.4%, while South Korea's Kospi decreased by 8.8%.
European markets also faced significant declines. The U.K.'s FTSE 100 Index dropped by 2.0%, Germany's DAX Index fell by 1.8%, and France's CAC 40 Index decreased by 1.4%.
In the bond market, treasuries surged early in the session but leveled off to end the day nearly flat. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, edged down by less than a basis point to 3.785%, after hitting an intraday low of 3.669%.
