Former President Trump on Sunday night appeared to gloat in response to the global market sell-off and suggested his Democratic rivals were to blame.
“STOCK MARKETS CRASHING. I TOLD YOU SO!!! KAMALA DOESN’T HAVE A CLUE. BIDEN IS SOUND ASLEEP. ALL CAUSED BY INEPT U.S. LEADERSHIP!” Trump wrote on his Truth Social platform late Sunday night.
U.S. stock markets plunged Friday following a weaker-than-expected jobs report that raised fears the economy could be slowing down faster than analysts had predicted. By Monday, the sell-off was intensifying, with stock futures for the S&P 500 down more than 2 percent and down more than 4 percent for Nasdaq.
Markets around the world declined, especially across Asia and Europe. In Japan, the Nikkei 225 index fell 12.4 percent, and the Topix index fell 12.2 percent.
Stock markets have generally been climbing since the beginning of 2023 on a foundation of strong economic data, as employment levels have continually surpassed expectations in the face of the Federal Reserve interest rate hikes meant to slow the economy.
Earlier this year, he said the market was doing well “because they think I’m going to be elected.” He also said investor sentiment was soaring because his polls against Biden were “so good.”
The Biden campaign mocked those comments in response, saying Trump was “desperately trying to take credit for the stock market hitting record highs under President Biden.”
Throughout the morning on Monday, Trump tried to tie the market downturn to Vice President Harris, calling it the “KAMALA CRASH.” He also warned of “THE GREAT DEPRESSION OF 2024!” and of “THE PROBABILITY OF WORLD WAR III.”
“TRUMP CASH vs. KAMALA CRASH!” he said in one post.
Republican lawmakers told The Hill that Trump was caught off guard by the surge in momentum behind Harris’s revamped campaign. Some Republican senators think Trump should have seen the swap atop the Democrat ticket coming and crafted a messaging and political strategy weeks ago.
The Hill has reached out to Harris’s campaign for a response to Trump’s recent comments.
Updated: 2:15 p.m.
Copyright 2024 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
For the latest news, weather, sports, and streaming video, head to The Hill.
Show comments
Dow drops 1,000, and Japanese stocks suffer worst crash since 1987 as markets quake around the world
STAN CHOE
Updated August 5, 2024 at 8:16 PM
1 / 15
APTOPIX Financial Markets Wall Street
Specialist Dilip Patel works at his post on the floor of the New York Stock Exchange, Monday, Aug. 5, 2024. Nearly everything on Wall Street is tumbling as fear about a slowing U.S. economy worsens and sets off another sell-off for financial markets around the world.(AP Photo/Richard Drew)
ASSOCIATED PRESSMore
NEW YORK (AP) — A scary Monday that started with a plunge abroad reminiscent of 1987 ‘s crash has swept around the world and pummeled Wall Street with more steep losses, as fears worsen about a slowing U.S. economy.
The S&P 500 was down by 3.1% in late trading and on track for its worst drop since 2022. The Dow Jones Industrial Average was reeling by 1,009 points, or 2.5%, with a little more than an hour remaining in trading, and the Nasdaq composite slid 3.8%.
The drops were just the latest in a global sell-off that began last week. Japan’s Nikkei 225 helped start Monday by plunging 12.4% for its worst day since the Black Monday crash of 1987.
It was the first chance for traders in Tokyo to react to Friday’s report showing U.S. employers slowed their hiring last month by much more than economists expected. That was the latest piece of data on the U.S. economy to come in weaker than expected, and it’s all raised fear the Federal Reserve has pressed the brakes on the U.S. economy by too much for too long through high interest rates in hopes of stifling inflation.
Professional investors cautioned that some technical factors could be amplifying the action in markets, and that the drops may be overdone, but the losses were still neck-snapping. South Korea’s Kospi index careened 8.8% lower, and bitcoin dropped below $54,000 from more than $61,000 on Friday.
Even gold, which has a reputation for offering safety during tumultuous times, slipped about 1%.
That’s in part because traders began wondering if the damage has been so severe that the Federal Reserve will have to cut interest rates in an emergency meeting, before its next scheduled decision on Sept. 18. The yield on the two-year Treasury, which closely tracks expectations for the Fed, briefly sank below 3.70% during the morning from 3.88% late Friday and from 5% in April. It later recovered and pulled back to 3.88%.
“The Fed could ride in on a white horse to save the day with a big rate cut, but the case for an inter-meeting cut seems flimsy,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Those are usually reserved for emergencies, like COVID, and an unemployment rate of 4.3% doesn’t really seem like an emergency.”
Of course, the U.S. economy is still growing, the U.S. stock market is still up a healthy amount for the year and a recession is far from a certainty. The Fed has been clear about the tightrope it began walking when it started hiking rates sharply in March 2022: Being too aggressive would choke the economy, but going too soft would give inflation more oxygen and hurt everyone.
Goldman Sachs economist David Mericle sees a higher chance of a recession within the next 12 months following Friday’s jobs report. But he still sees only a 25% probability of that, up from 15%, in part “because the data look fine overall” and he does not “see major financial imbalances.”
Some of Wall Street’s recent declines may simply be air coming out of a stock market that romped to dozens of all-time highs this year, in part on a frenzy around artificial-intelligence technology. Critics have been saying for a while that the stock market looked expensive after prices rose faster than corporate profits.
“Markets tend to move higher like they’re climbing stairs, and they go down like they’re falling out a window,” according to JJ Kinahan, CEO of IG North America. He chalks much of the recent worries to euphoria around AI subsiding, with pressure rising on companies to show how AI is turning into profits, and “a market that was ahead of itself.”
The only way for stocks to look less expensive is either for prices to fall or for their profits to strengthen. Hope is still high for the latter, with growth for S&P 500 profits this past quarter looking to be the strongest since 2021.
Professional investors also pointed to the Bank of Japan’s move last week to raise its main interest rate from nearly zero. Such a move helps boost the value of the Japanese yen, but it could also force traders to scramble out of deals where they borrowed money for virtually no cost in Japan and invested it elsewhere around the world.
U.S. stocks pared their losses Monday after a report said growth for U.S. services businesses was a touch stronger than expected. Growth was led by arts, entertainment and recreation businesses, along with accommodations and food services, according to the Institute for Supply Management. Treasury yields also pared their drops following the better-than-expected data.
Still, stocks of companies whose profits are most closely tied to the economy’s strength took sharp losses on the fears about a slowdown. The small companies in the Russell 2000 index dropped 3.7%, further dousing what had been a revival for it and other beaten-down areas of the market.
Making things worse for Wall Street, Big Tech stocks also tumbled as the market’s most popular trade for much of this year continued to unravel. Apple, Nvidia and a handful of other Big Tech stocks known as the “ Magnificent Seven ” had propelled the S&P 500 to records this year, even as high interest rates weighed down much of the rest of the stock market.
But Big Tech’s momentum turned last month on worries investors had taken their prices too high and expectations for future growth are becoming too difficult to meet. A set of underwhelming profit reports that began with updates from Tesla and Alphabet added to the pessimism and accelerated the declines.
Apple fell 6.5% Monday after Warren Buffett’s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker.
Nvidia, the chip company that’s become the poster child of Wall Street’s AI bonanza, fell even more, 7.2%. Analysts cut their profit forecasts over the weekend for the company after a report from The Information said Nvidia’s new AI chip is delayed. The recent selling has trimmed Nvidia’s gain for the year to 101.1% from 170% in the middle of June.
Because the Magnificent Seven companies are the market’s biggest by market value, the movements for their stocks carry much more weight on the S&P 500 and other indexes.
Worries outside corporate profits, interest rates and the economy are also weighing on the market. The Israel-Hamas war may be worsening, which beyond its human toll could also cause sharp swings for the price of oil. That’s adding to broader worries about potential hotspots around the world, while upcoming U.S. elections could further scramble things.
Wall Street has been concerned about how policies coming out of November could impact markets, but the sharp swings for stock prices could affect the election itself.
The threat of a recession is likely to put Vice President Kamala Harris on the defensive. But slower growth could also further reduce inflation and force former President Donald Trump to pivot from his current focus on higher prices to outlining ways to revive the economy.
“It comes down to jobs,” said Quincy Krosby, chief global strategist for LPL Financial. They drive spending by U.S. consumers, which in turn is the biggest part of the U.S. economy.
“When we get to election day, the unemployment rate is going to be extremely important.”
___
AP Business Writers Elaine Kurtenbach, Matt Ott, Christopher Rugaber and Damian J. Troise contributed.
Show comments
US stocks tumble on fears over slower growth
JOÃO DA SILVA IN SINGAPORE & DEARBAIL JORDAN IN LONDON – BUSINESS REPORTERS, BBC NEWSSee more
August 5, 2024 at 8:04 PM
US stock markets fell sharply on Monday following falls in Europe and Asia as fears rose that the American economy is heading for a slowdown.
The technology-heavy Nasdaq index opened 6.3% lower after a sharp decline at the end of last week, but pared its loses during the day.
The other main US indexes also opened sharply down, while stock markets in Europe and Asia plunged with Japan’s Nikkei 225 down by some 12.4%.
It comes after weak jobs data in the US on Friday sparked concerns about the world’s largest economy.
The US Federal Reserve also held off cutting interest rates last week – something that typically boosts growth – in contrast to other central banks such as the Bank of England.
And there has been concern that shares in big technology companies, particularly those investing heavily in artificial intelligence (AI), have been overvalued and are now facing difficulties.
Chipmaker Intel announced major layoffs last week as well as disappointing financial results, and there is speculation that its rival Nvidia, which makes AI chips, will delay its latest product launch.
On the markets a short while ago:
- The Dow Jones index, which features America’s 30 biggest listed companies, was down 2.7% having pared its losses, while the tech-heavy Nasdaq was 4% lower and the S&P 500 was down 3.2%.
- Shares in big-hitting tech stocks were hit hard, with Nvidia down 7%, Amazon 4.3% lower and Apple down 7%.
- In Europe, the CAC-40 in Paris trimmed earlier losses to end 1.4% lower while Frankfurt’s DAX and the UK’s FTSE 100 lost about 2% each.
Doubts about US economy
The market rout began on Friday after weaker-than-expected jobs data from the US fuelled speculation that its economy is slowing.
In July, US employers added 114,000 roles, far fewer than expected while the unemployment rate ticked up from 4.1% to 4.3%.
The figures raised concerns that a long-running jobs boom in the US might be coming to an end. It also stoked speculation about when – and by how much – the Federal Reserve will cut interest rates.
Simon French, chief economist at Panmure Liberum, said it was not yet clear if the jobs figures were an aberration because of Hurricane Beryl, a Category 5 storm that hit parts of the Gulf Coast of the United States in July, or because it was the first sign that companies were hiring fewer workers.
The most recent data showed that the US economy grew at an annual rate of 2.8% in the three months to the end of June, much stronger than most developed countries.
- Is the US really heading for recession?
- Follow live updates: Wall Street tumbles
- US jobs data weaker than expected
Shanti Kelemen, chief investment officer at M&G Wealth, told the BBC’s Today programme it was hard to say whether the US would tip into recession or not.
“You can pick out evidence to create a positive story, you can also pick out the evidence to create a negative story,” she said.
“I don’t think it universally points to one direction yet.”
The rout in US markets has spread globally amid fears of contagion.
As the Nikkei plunged in Japan, stock markets in Taiwan, South Korea, India, Australia, Hong Kong and Shanghai all tumbled by between 1.4% and 8% on Monday.
Japan’s problems stem in part from its currency, the yen, which has been strengthening against the US dollar since the Bank of Japan raised interest rates last week.
It has made stocks in Tokyo – and Japanese goods in general – more expensive for foreign investors and buyers.
At the same time inflation in Japan rose by more than expected in June while the economy shrank in the first three months of the year.
Show comments
Dollar down as US rate cut bets rise, yen surges
HANNAH LANG AND SAQIB IQBAL AHMED
Updated August 5, 2024 at 8:15 PM
1 / 3
Dollar down as US rate cut bets rise, yen surges
Illustration shows U.S. Dollar banknote
By Hannah Lang and Saqib Iqbal Ahmed
NEW YORK (Reuters) -A surge in the yen to a seven-month high led a broad dollar fall, as a slew of economic data last week raised the prospect of a U.S. economic downturn and bigger interest rate cuts from the Federal Reserve.
The dollar index, which tracks the U.S. currency against a basket of six others, was down 0.46% to 102.68, after sinking as low as 102.15, its weakest since January 12.
Against the yen, the dollar fell 2.04% to 143.5, close to the weakest level for the year. The euro was up 0.37% to $1.095, after rising as high as $1.1009, its strongest since Jan. 2.
Weaker-than-expected U.S. jobs data, along with disappointing earnings reports from large technology firms and heightened concerns over the Chinese economy, have sparked a global sell-off in stocks, oil and high-yielding currencies in the past week as investors sought the safety of cash.
The selling continued on Monday, with U.S. Treasury yields falling further, stock indexes in the red, bitcoin dumped and the dollar losing ground.
“When you zoom out and look at the big picture, whenever there’s a crisis in markets, it’s clear that there’s far too much leverage and everyone is crowded into the same trades,” said Adam Button, chief currency analyst at ForexLive.
Treasury yields have been falling sharply since last week, when the Fed kept the policy rate in its current 5.25% to 5.50% range while Fed Chair Jerome Powell opened the possibility of a rate cut in September.
But by Friday, after data showed the unemployment rate had jumped, expectations for rate cuts rose.
“Friday’s (non-farm payrolls) report was a bit of a shock to the global system, and markets are very worried that the U.S. may no longer be a viable driver of global growth,” said Helen Given, FX trader at Monex USA in Washington.
The Japanese yen’s surge comes as traders aggressively unwound carry trades. So-called carry trades, where investors borrow in money from economies with low interest rates such as Japan or Switzerland to fund investments in higher-yielding assets elsewhere, have been popular in recent years.
“Whenever there’s trouble, the rush to the exit is so dramatic that it creates these incredible waves in markets that swamp related markets,” said Button. “You never know how much money is piled into the carry trade until it unwinds.”
On Monday, Fed fund futures reflected traders pricing a near 100% chance of a 50 basis point cut at the central bank’s September meeting, according to CME FedWatch.
“The Japanese equity sell-off during Asian trading spooked markets in a big way, coupled with the yen’s resurgence, and we may be seeing the so-called ‘panic spiral’ that many have been concerned about,” Monex’s Given said.
Meanwhile, the Swiss franc, another popular carry trade funding currency, was 0.83% higher at 0.85 to the dollar. The franc, a traditional safe haven, was also trading near a seven-month high.
The dollar found some relief against the British pound as the marked deterioration in global investor risk sentiment sapped demand for riskier currencies.
The depreciation of Mexico’s peso extended into its third day on Monday, and the U.S. dollar rose 1.64% to 19.48 pesos, on investor risk aversion.
In cryptocurrencies, bitcoin and ether plunged on Monday to multi-month lows as investors a rushed out of risky assets. Bitcoin was down 15.11% to $53,094, heading for its largest one-day fall since November 2022. Ether was last down 21.25% at $2,374.70.
(Reporting by Hannah Lang and Saqib Iqbal Ahmed in New york; Additional reporting by Vidya Ranganathan in Singapore, Sruthi Shankar and Sarupya Ganguly in Bengaluru; Editing by Christopher Cushing, Ros Russell, Christina Fincher, Nick Zieminski and Jonathan Oatis)
Show comments
In Other News
David Lynch, 78, is ‘homebound’ after emphysema diagnosis, says he would have to dire…
‘Deadpool & Wolverine’ director Shawn Levy reveals he’s the godfather to Ryan Reynold…
4 lessons following Warren Buffett’s move to sell half of Berkshire Hathaway’s Apple …
Analysis: Why the stock market is freaking out again
Dolly Parton has a new baking mix perfect for fall
21 Mediterranean recipes that will make you feel like you’re on vacation
Tom Brady and daughter Vivian have cute family day watching Simone Biles at Paris Oly…
Brooke Shields’ iconic Calvin Klein jeans going to auction: ‘Can’t wait for someone t…
Georgia repeats at No. 1 as SEC, Big Ten dominate preseason US LBM Coaches Poll
Rams standout WR Puka Nacua reportedly ‘week to week’ with knee injury
The Latest: Debby knocks out power to hundreds of thousands in Florida, Georgia
From Our Partners
Why I Did Less and Got More: How The 3-Minute Rule Changed My LifeBlinkist Magazine-
These Are The Most Beautiful Women In The World5minstory.com-
Looking for a soulmate!Elenadate-
ED Treatments You May Not Believe Exist In Mexico.ED Treatment | Search Ads-
- Feedback
- Help
- Join AOL
- Accessibility
- EU Digital Services Act
- Terms and Privacy Policy
- Privacy Dashboard
- About Us
- About Our Ads
- Advertising
- Sitemap
