Recession Fears Rock U.S. Stock Markets

Major U.S. stock indexes plummeted on Monday due to recession worries, compounded by Berkshire Hathaway's reduction in its Apple stake. Despite a slight rebound from U.S. service sector activity, technology shares like Nvidia, Microsoft, and Alphabet dropped. Treasury yields hit a year-low, indicating potential economic downturn.

Major U.S. stock indexes ended sharply lower on Monday as recession worries swept global markets and drove investors away from risky assets. Apple shares plunged following Berkshire Hathaway's decision to cut its stake in the company, adding to the concerns.

The losses were slightly offset in the late morning when U.S. services sector activity showed signs of recovery in July, driven by a rise in orders and employment. Despite this, shares of tech giants Nvidia, Microsoft, and Alphabet slid. The Cboe Volatility index, Wall Street's 'fear gauge,' spiked significantly.

Portfolio manager Neville Javeri noted the market's sell-off was an extension of last week's anxiety, initially triggered by weak jobs data, raising fears that the Fed may need to take more proactive measures on unemployment. Preliminary data revealed substantial drops in major indexes, exacerbated by broader economic concerns and disappointing forecasts from big U.S. tech companies.

U.S. Treasury yields fell to their lowest levels in a year, and the gap between two- and 10-year Treasury notes turned positive, suggesting a potential economic downturn. Traders are now highly expecting a 50 basis point cut in benchmark rates by the Fed in September. Separately, Pringles maker Kellanova saw shares soar amid speculation of a buyout by Mars.

(With inputs from agencies.)