Stock futures tumbled on Monday as markets around the world anticipated a disappointing jobs report last week that fueled fears of a possible recession.
Each of the major stock indexes fell more than 2% in premarket trading on Monday. The technology-heavy Nasdaq fell almost 6%.
The market decline sparked calls for a major rate cut at the Federal Reserve’s next meeting in September. Some investors expressed an even more urgent request for a rare emergency rate cut as soon as this week.
Japan’s main Nikkei 225 stock index fell more than 12% on Monday, its worst trading day since 1987.
In premarket U.S. trading, chipmaker Nvidia fell more than 13%. Apple fell by more than 10%.
“Investors are feeling tremendous pain globally,” Dan Ives, head of equity research at investment firm Wedbush, said in a note to clients. US markets, he added, “are trading heavily in the red across the board.”
Employers hired 114,000 workers in July, well below economists’ expectations for 185,000 new jobs, US Bureau of Labor Statistics data showed on Friday. The unemployment rate rose to 4.3%, the highest level since October 2021.
Unemployment has soared this year from 3.7% to 4.3%. That trend has triggered a recession indicator known as the “Sahm rule,” which states that a 0.5 percentage point increase in unemployment within a 12-month period usually precedes a recession.
On Sunday, Goldman Sachs economists raised the probability of a US recession next year from 15% to 25%.
This is an evolving story. Check back for updates.