Global Stock Markets in Multitrillion-Dollar Freefall as Investors Seek Safe Havens

Equity markets faced a multitrillion-dollar tailspin due to a slump in global tech stocks. Investors shifted to traditional safe havens like bonds and yen. The market reaction followed disappointing earnings from Alphabet and Tesla and a surprise interest rate cut by China's central bank. Significant losses impacted major global indexes and commodities.

Equity markets were locked in a multitrillion-dollar tailspin on Thursday as a slump in global tech stocks sent investors fleeing to traditional safe havens like bonds, the yen and Swiss franc.

Wall Street futures were back in the red and Europe's main bourses were more than 1% lower as both there, and in Asia, traders reacted to Wednesday's worst day for the Nasdaq since 2022, after underwhelming earnings from Alphabet and Tesla. Chinese stocks, iron ore and oil prices all dropped too after China's central bank sprang a surprise cut in longer-term interest rates, only stoking further worries about the world's second-largest economy.

The sell-off in world stocks, which now amounts to over $3 trillion dollars over the last six sessions, saw investors ramp up bets on rate cuts globally, with futures implying a 100% chance of a Federal Reserve easing in September. A spike in market volatility fuelled a vicious squeeze on carry trades which saw the U.S. dollar sink another 0.7% to 152.25 yen on Thursday.