US stocks plunged Monday

In early August, Wall Street and the cryptocurrency market faced a devastating Black Monday. The Dow Jones Industrial Average nosedived by over 1,000 points, the S&P 500 fell more than 4.2%, and the Nasdaq Composite tumbled over 6%, according to CNN. CoinShares reported that this sharp decline was coupled with an astonishing $528 million in cryptocurrency outflows.

U.S. stock markets plunged

U.S. stock markets plunged on Friday after a weaker-than-expected jobs report heightened concerns that the economy might be slowing down more rapidly than analysts had anticipated. By Monday, the sell-off had worsened, with S&P 500 futures down over 2 percent and Nasdaq futures down more than 4 percent.

In afternoon trading, all three major U.S. indexes — the Dow Jones Industrial Average of 30 blue chip stocks, the broader S&P 500 index and the tech-heavy NASDAQ — were still down more than 2% after sustaining even steeper declines earlier in the day.

Global markets also declined, with notable drops in Asia and Europe. In Japan, the Nikkei 225 index fell 12.4 percent, and the Topix index dropped 12.2 percent.
Since the start of 2023, stock markets had been rising, bolstered by strong economic data and robust employment figures despite Federal Reserve interest rate hikes intended to slow the economy.

US recession fears lead to the stock market crash

Stocks fell sharply on Monday morning, driven by growing worries about the U.S. economy's resilience and the future of microchip production, causing turmoil on Wall Street.
The Dow Jones Industrial Average started the day down by 1,100 points, a 2.8 percent drop right after the opening bell. Dow futures had already plummeted over 1,200 points before the market began trading. The tech-heavy Nasdaq Composite plunged 6.2 percent, while the S&P 500 index dropped 4.2 percent once trading commenced.

The Federal Reserve is facing intense scrutiny as it addresses the risk of a potential U.S. recession. With interest rates at their highest level in 23 years, there is growing pressure for the Fed to take decisive actions that could stabilize the economy and rebuild investor confidence. The steps the Fed takes in the near future will be critical in shaping the market's trajectory and aiding the recovery of impacted trading platforms. Two years ago, the Fed started increasing borrowing costs to curb inflation, which had caused prices to soar for essentials like rent and food. Since then, it has aimed for a "soft landing," seeking to control inflation without causing an economic recession.

The greatest risk is that widespread panic over the market decline could trigger a chain reaction. As fear spreads, spending slows, concerns escalate, and job losses increase. This cycle of reduced spending and growing anxiety can create a self-perpetuating downward spiral, exacerbating the situation. If the market continues to drop, the resulting decline in perceived wealth will further impact economic activity.

The U.S. added 114,000 jobs in July and the jobless rate rose to 4.3 percent, according to the Labor Department, falling short of the 175,000 new jobs and 4.1 percent unemployment rate projected by economists. The July jobs report also followed a string of lackluster second-quarter earnings reports from major companies, including chipmaker Intel, which announced plans to slash its workforce.

Trump blames Harris, Biden for stock market meltdown

On Monday, Republican presidential nominee Donald Trump attributed the stock market's dramatic decline to Vice President Kamala Harris, despite having previously claimed credit for the market's record highs earlier in the year.

"Of course there is a massive market downturn. Kamala is even worse than Crooked Joe," Trump wrote in a post on Truth Social about Harris, the de facto Democratic presidential nominee.

During Trump's presidency in March 2020, the S&P 500 saw several significant declines, including a notable 12% drop on March 16, 2020, driven by rising fears over the spread of COVID-19 in the U.S. This was one of the most severe declines in the index's history.
Since President Biden withdrew from the election in July and endorsed Kamala Harris as the Democratic nominee, Trump has lost his lead in the polls.

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