Global stock markets plummeted on Monday, with Japan’s Nikkei index experiencing a staggering 13% drop, reminiscent of the 2011 financial crisis. The sharp decline was driven by fears of a potential US recession, prompting investors to flee riskier assets and seek safer havens like the yen and Swiss franc. The selloff triggered circuit breakers across Asian exchanges, underscoring the market’s volatility.
Nasdaq and S&P 500 futures also took heavy hits, reflecting a widespread market rout. Japanese bond yields fell significantly as investors reassessed the Bank of Japan’s interest rate outlook. In the US, Treasury bond yields dropped, with increasing bets on significant rate cuts by the Federal Reserve to support economic growth.
Economic analysts have raised the probability of a US recession, anticipating multiple rate cuts by the Fed. The downturn in Treasury yields has overshadowed the US dollar’s safe-haven appeal, with major currencies experiencing volatility. As the global economic outlook remains uncertain, investors are closely watching upcoming earnings reports and economic data for further insights.