FX.co ★ U.S. Stocks Showing Another Significant Move To The Downside

In continuation of the decline observed in the last session, stocks made another substantial downward move on Monday. The major indexes have all decreased significantly, with the Nasdaq and the S&P 500 touching their lowest levels in three months.

At present, the major indexes are off their session lows but remain decisively negative. The Nasdaq has fallen by 454.42 points or 2.7 percent to 16,321.75, the S&P 500 has dropped by 133.64 points or 2.5 percent to 5,212.92, and the Dow is down by 953.28 points or 2.4 percent to 38,783.98.

The enduring weakness on Wall Street follows a sell-off in overseas markets, where Japan's Nikkei 225 Index experienced its steepest decline since "Black Monday" in October 1987.

Fears of a potential recession in the U.S. economy, stoked by last Friday's disappointing jobs report, have instigated significant weaknesses in international markets.

Shares of the artificial intelligence leader Nvidia (NVDA) are plummeting by 7.2 percent amid the unwinding of the recent AI trade, which had previously driven the markets to record highs.

Additionally, tech giant Apple (AAPL) has fallen by 4.6 percent following the revelation that Warren Buffett's Berkshire Hathaway sold nearly half its stake in the iPhone manufacturer.

Stocks recovered somewhat following a report from the Institute for Supply Management indicating that U.S. service sector activity turned positive in July.

The ISM reported that its services PMI climbed to 51.4 in July from 48.8 in June, with a reading above 50 signaling growth. Economists had anticipated the index to rise to 51.0.

"While the uptick in the ISM services index may not fully alleviate market concerns of a recession following Friday's employment report, it supports our view of an economy transitioning rather than nearing collapse," commented Matthew Martin, U.S. Economist at Oxford Economics.

He added, "Expectations for aggressive rate cuts in September are exaggerated. We foresee the Fed proceeding with a 25 basis-point cut at the meeting."

Sector News

Computer hardware stocks are among the day's poorest performers, leading to a 4.5 percent dive in the NYSE Arca Computer Hardware Index.

Additionally, airline stocks exhibit noticeable weakness, evidenced by a 4.4 percent drop in the NYSE Arca Airline Index.

Semiconductor stocks have also significantly declined, with the Philadelphia Semiconductor Index plummeting by 1.8 percent to a three-month intraday low.

Other major sectors have similarly moved lower amid sustained broad-based selling pressure on Wall Street.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region fell sharply on Monday. Japan's Nikkei 225 Index nosedived by 12.4 percent, while South Korea's Kospi plunged by 8.8 percent.

The major European markets have also seen marked declines. The French CAC 40 Index is down by 1.6 percent, and the U.K.'s FTSE 100 Index and Germany's DAX Index have both decreased by 2.1 percent.

In the bond market, treasuries continue to see strength due to their status as a safe haven. Consequently, the yield on the benchmark ten-year note, which moves inversely to its price, has decreased by 2.9 basis points to 3.765 percent.