Dow futures sink about 300 points after a painful week on Wall Street

By Mike Murphy

Futures for S&P 500 and Nasdaq-100 also down sharply Sunday night

U.S. stock-market futures fell late Sunday, after a volatile week on Wall Street that saw the Nasdaq fall into correction territory.

Dow Jones Industrial Average futures (YM00) slid about 300 points, or 0.8%, as of 10:15 p.m. Eastern on Sunday, as S&P 500 futures (ES00) fell 1.4% and Nasdaq-100 futures (NQ00) tumbled 2.4%. Each had improved slightly late Sunday from their session lows.

Crude oil futures (CL00) were about flat after rallying earlier amid heightened concerns over escalating hostilities in the Middle East. Cryptocurrencies fell, led by bitcoin (BTCUSD), which dipped 8% and slipped below the $55,000 level after topping $65,000 on Friday, while ether (ETHUSD) sank more than 14%

Meanwhile, Japan’s Nikkei 225 JP:NIK plunged 5%, picking up where last week left off, as global markets were rattled by the latest U.S. economic data and Wall Street’s losses.

U.S. stocks dropped Friday after a softer-than-expected jobs report raised worries about economic growth, which followed Fed signals Wednesday that it could cut interest rates at its September meeting. But investors fear the cuts may come too late, as the risk of recession rises.

See more: Stock-market investors went from cheering a ‘Goldilocks’ economy to fearing recession. Here’s what’s next.

All three major indexes booked steep losses last week, with the S&P 500 SPX falling 2.1% for its worst week since April, according to FactSet data. The Dow DJIA fell 2.1% for the week, while the Nasdaq COMP saw a weekly drop of 3.4%. The Nasdaq closed Friday down 10% from its record close of 18,647.45 on July 10, according to Dow Jones Market Data, landing it in correction territory, defined as a drop of at least 10% from a recent high.

Investors spiraled “as market participants scrambled for hedges amidst a growing panic over interest rates and a looming recession,” wrote Stephen Innes, managing partner at SPI Asset Management, in a note Sunday. “To put it mildly, the spike in volatility-of-volatility is a spectacle that underlines just how jittery markets have become.”

“The real question now looms: Can the typical market reflex to sell volatility or buy the market dip prevail over the deep-seated anxiety brought on by this sudden and sharp recession scare?” Innes wrote.

Investors may be bracing for tech stocks to fall further Monday, after Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B)disclosed Saturday it had reduced its stake in Apple Inc. (AAPL) by nearly 50% last quarter.

Tech stocks have been on the ropes following some lackluster earnings, including those by chip maker Intel Corp. (INTC), whose stock plunged 26% on Friday after its disappointing earnings report.

Also read: Recession fears rattle U.S. stock market. Can Wall Street’s ‘Great Rotation’ trade roll on?

-Mike Murphy

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08-04-24 2219ET

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