Global Markets Plunge Amid U.S. Recession Fears

Worldwide stock markets experienced significant declines on Monday due to U.S. recession fears. Japanese shares saw their largest drop since 1987, while European indices also fell sharply. Investors flocked to safe-haven assets like the yen and Swiss franc, and rising speculation about central bank rate cuts added to market volatility.

Worldwide stock markets plummeted on Monday, with Japanese shares recording their largest decline since 1987's 'Black Monday,' as concerns of a U.S. recession prompted investors to flee risky assets. The yen and Swiss franc surged as investors sought safe havens, leading to the unwinding of crowded carry trades.

Japan's Nikkei closed 12.40% lower at 31,458.42, and the broader Topix shed 12.48% to 2,220.91. European markets also suffered, with the STOXX 600 index down 2.6% to 487.15 points. Key indices in Germany, France, the UK, and Spain reported more than 2% losses.

The U.S. 10-year Treasury yield hit 3.723%, its lowest since mid-2023. A weak payroll report increased expectations for a significant Federal Reserve rate cut in September. Analysts estimated a 25-50% likelihood of a U.S. recession, adding to the anticipation. Investors are keenly awaiting earnings reports from major companies to gauge economic sentiment further.