Dow plunges more than 1,000 points as global stock rout deepens on recession fear

Losses accelerated on Monday after Japan's stock market experienced its worst decline since the Black Monday crash in 1987, falling 12%.

• The stock market crashed Monday, with the Nasdaq 100 dropping nearly 6%.
• The decline began last week after poor earnings reports and a weak July jobs report.
• Japan's surprise rate hike and Berkshire Hathaway's Apple stake cut fueled investor fears.

US stocks crashed on Monday, with the Nasdaq shedding nearly 6% as the global market rout that kicked off late last week accelerated.

The Nasdaq Composite plunged and the Dow Jones Industrial Average shed more than 1,000 points in Monday morning trading, with the tech-heavy index falling further into correction territory.

The stock market decline started last week after worrying earnings reports from Amazon and Intel and a big miss in July nonfarm payrolls sparked concerns of a potential recession.

Since Thursday, the S&P 500 is down about 7% while the Nasdaq 100 is down 9%.

The losses accelerated on Monday after Japan's stock market experienced its worst decline since the Black Monday crash in 1987, falling 12%.

A surprise interest-rate hike of 15 basis points by the Bank of Japan last week led to an unwind of the wildly popular Yen carry trade, which helped accelerate the recent stock market losses.

All of these factors, combined with the idea that the Federal Reserve missed its chance to cut interest rates at its meeting last week, added to investor concerns that an economic recession is near.

"Markets are clearly nervous about the divergent paths central banks are taking, leading to lots of volatility," Jamie Cox, Managing Partner for Harris Financial Group, said Monday. "Couple that with a potential escalation of hostilities in the Middle East and a Presidential election cycle that is rife was craziness, things are ripe for negativity."

Further concerns on the radar this week included Berkshire Hathaway's second-quarter earnings report, which revealed that Warren Buffetts' conglomerate cut its massive Apple stake by about 50%.

Berkshire Hathaway now holds a record $277 billion in cash, leading to some investors worrying that Buffett has soured on the stock market.

In another sign of the risk-off sentiment gripping markets, bitcoin tumbed 19% since Friday, crashing below $50,000.

"At some stage, buyers will come back in to take advantage of 'knock-down' prices. But there's no sign that the major indices have stabilized yet. The bigger question is whether this bloodletting will prove sufficient to provide a basis for a resumption of the stock market rally, and ultimately fresh record highs. The alternative is that the top is in, and investors will have to adapt their outlook, and strategies, accordingly," FCA senior market analyst David Morrison said.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Monday:

• S&P 500: 5,171.35, down 3.28%
• Dow Jones Industrial Average: 38,659.97, down 2.71% (-1,077 points)
• Nasdaq composite: 16,088.48, down 4.1%

Here's what else is going on today:

• Nvidia chips used to power advanced AI are finding their way to the Chinese military despite a US blockade.
• The sell-off in technology stocks may herald the long-awaited AI reckoning.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil fell 0.97% to $72.81 a barrel. Brent crude, the international benchmark, declined 0.90% to $76.12 a barrel.
• Gold was lower by 1.51% to $2,432.40 per ounce.
• The 10-year Treasury yield dropped 9 basis points to 3.70%.
• Bitcoin plunged 14.2% to $49,846.