FTSE 100, Dow, S&P and Nasdaq hit by tech-stock panic … here’s what the market said

The global stock markets took a dramatic downturn on Monday, as multiple bearish signals hit sentiments.

Sharp declines in big-tech stocks, fears of a looming US recession, and volatility spikes have painted a grim picture for investors.

In London, the FTSE 100 gave up just over 2% to trade down to 8,008.

The Dow Jones lost 850 points, 2.14%, to 38,886 and the S&P 500 dropped 125 points, 2.37%, to 5,219 and the Nasdaq was down 419 points,2.28%, to 18,007.

Apple (NASDAQ:AAPL) stock was down 4% lower at $211, and Nvidia (NASDAQ:NVDA) was down 5.8% at $101.04.

Here, read what the market had to say about Monday’s volatility.

"Brutal selling continued into the new week"

“Friday’s brutal sell off has continued into the new week as investors mull the prospect that the much-touted US soft landing looks like being a whole lot bumpier than markets had hoped,” said Danni Hewson, AJ Bell head of financial analysis.

“Circuit breakers have been firing on Asian markets as stocks tumbled, with investors scurrying to price the impact a stalling US economy is likely to have.

“London markets haven’t escaped the Monday meltdown with just a handful of companies on the FTSE 100 opening on the front foot and a smorgasbord of sectors losing ground, including miners and oil giants.”

"US Sneezes, Global Markets Catch a Cold"

“The FTSE 100 has opened down as the US sneeze risks becoming a cold,” Hargreaves Lansdown head of equity research Derren Nathan said in a note.

“Asia Pacific equities continued on Monday where indices to the west finished last week. Japanese stocks gave up most of the last year’s gains with the Topix and Nikkei plunging over 7%, closing more than 20% below last month’s record highs.

“Exporters bore the brunt of the sell-off as contagion from last week’s poor employment and manufacturing data in the States put recessionary fears back on the table.”

Nathan added that the market will now be asking “how much” rather than “if” the Federal Reserve, and “the odds now moving in favour of a half point cut.”

"Fear Grips the Markets"

Investors continue to flee tech stocks, IG Market’s chief market analyst Chris Beauchamp.

"Markets are in absolute turmoil this morning thanks to the Nikkei 225's biggest one-day drop since 1987, which has wiped out the index's gains for the year,” Beauchamp said.

Volatility as measured by the Vix is at a two-year high, as the index earns its moniker of 'the Fear Index.'

Futures point to a torrid time for European and US markets too - the FTSE 100 is expected to open down 1% and the Dax by 2%, but it is on Wall Street where a fresh wave of selling is on the cards.

"Economic Data Failed to Reassure"

“US markets endured another bruising session as a feeble jobs report escalated recessionary fears, resulting in moments of mayhem elsewhere,” Interactive Investor head of markets Richard Hunter.

He noted that Friday’s non-farm payrolls report showed that just 114,000 jobs had been added in July, against estimates of 185,000, and sharply lower than the 179,000 figure for June, which itself was revised down from an initial print of 206,000.

At the same time, the unemployment rate increased to 4.3%, from 4.1%.

"Perfect Storm Hits Equities"

"Sentiment has dramatically changed in just one month,” Saxo Bank’s strategy team said in a note.

“We have gone from high confidence, a record equity index concentration and almost no rate cuts expected in the US, to a market that is now pricing in five rate cuts by year-end in the US and equity markets tumbling in Japan.

“The short-term outlook is right now driven by risk management policies kicking into gear across many institutional investors.

“Adding to the overall moves are factors such as AI profit taking, stronger JPY, 1-day options exacerbating moves, and finally the equity market index concentration which was the highest in 90 years just three weeks ago."

"Balance wanted amid market chaos"

“Last week ended on a sour note for global equities following a bad run of results from a number of US mega cap technology stocks and poor economic readings in the form of Purchasing Manager Indices and the latest US labour market report,” said Forvis Mazars chief investment officer Ben Seager-Scott.

“With expectations set high earlier this year, it doesn’t take much bad news to create sharp movements to the downside.

“However, it is too easy to be drawn to the worst-case scenario, and on the whole, we remain neutral.”