Traders
work
on
the
floor
of
the
New
York
Stock
Exchange
(NYSE)
on
July
22,
2024
in
New
York
City.
Spencer
Platt
|
Getty
Images
S&P
500
futures
bounced
in
overnight
trading
after
the
broad
index
notched
its
worst
day
in
nearly
two
years
as
global
markets
sold
off.
Futures
tied
to
the
S&P
500
rose
0.9%,
while
Nasdaq
100
futures
rallied
1.3%.
Futures
connected
to
the
Dow
Jones
Industrial
Average
jumped
222
points,
or
about
0.6%.
The
overnight
moves
follow
a
sharp
sell-off
during
regular
trading.
The
30-stock Dow
dropped
1,033.99
points,
or
2.6%,
while
the S&P
500 slid
3%.
Both
indexes
notched
their
worst
sessions
since
September
2022.
The Nasdaq
Composite shed
3.43%,
tumbling
deeper
into
a
correction.
A
weak
July
jobs
report
Friday
sparked
concerns
that
the
Federal
Reserve
is
behind
the
curve
on
rates
cuts,
fueling
fears
of
a
recession.
These
fears
spilled
over
into
global
markets,
with
Japan’s
Nikkei
225
index
registering
its
worst
daily
decline
since
Black
Monday
in
1987.
U.S.
Treasury
yields
declined
as
investors
flocked
to
safe-haven
bonds.
The
Cboe
Volatility
Index
at
one
point
surged
to
65,
its
highest
level
since
2020.
The
Dow,
S&P
500
and
Nasdaq
are
down
5%,
6%
and
8%
respectively
in
three
days,
their
worst
3-day
performance
in
more
than
two
years.
A
major
unwind
in
the
yen
“carry
trade”
also
contributed
to
the
volatility.
The
Bank
of
Japan
last
week
raised
interest
rates,
contributing
to
a
rise
in
the
yen.
That’s
affected
the
practice
of
traders
borrowing
in
the
cheaper
currency
to
purchase
other
global
assets.
“After
such
a
strong
rally
since
last
fall,
valuations,
sentiment,
and
investor
positioning
had
become
stretched,”
said
Quincy
Krosby,
LPL
Financial’s
chief
global
strategist.
“What
markets
are
experiencing
today
is
an
unwinding
of
that
bullish
positioning,
which
is
particularly
evident
in
the
yen
and
the
so-called
carry
trade.”
Artificial
intelligence
stocks
bore
the
brunt
of
Monday’s
spiral,
with
Nvidia
and
Apple
dropping
about
6%
and
nearly
5%,
respectively.
Both
stocks
bounced
in
after-hours
trading.
The
VanEck
Semiconductor
ETF
(SMH)
fell
2%
while
megacaps
Alphabet,
Amazon
and
Tesla
dropped
more
than
4%.
All
three
stocks
rose
about
1%
in
overnight
trading.
Traders
have
been
worried
as
of
late
as
to
when
megacap
tech
companies’
investments
in
AI
will
pay
off.
Many
investors
have
come
to
view
Monday’s
sell-off
as
long
overdue
in
a
market
that’s
reached
high
valuations
and
new
records,
with
some
cautioning
that
the
pain
may
have
more
room
to
run.
“It’s
too
early
to
say
the
low
is
in,”
wrote
Keith
Lerner,
Truist’s
co-chief
investment
officer.
“There
has
been
damage
done,
and
the
repair
process
will
likely
take
time.
However,
the
risk/reward
appears
to
be
gradually
improving
as
the
market’s
bar
for
positive
surprises
resets
lower.”
In
other
news,
Palantir
Technologies
surged
12%
in
after-hours
trading
on
strong
quarterly
results
and
a
guidance
lift,
while
Lucid
Group
rallied
nearly
6%
on
better-than-expected
revenue
in
the
second
quarter.
