Wall Street has been hit by a market rout, with the Nasdaq Composite dropping 6.2% and the S&P 500 falling 4.2%. The fear of a recession and concerns about the US economy are at the heart of the sell-off. The sharp decline of Apple, due to Warren Buffett’s firm halving its stake, has also impacted the market. The VIX, Wall Street’s fear index, is at a four-year high.
Despite the global panic and market sell-off, the fear index has subsided slightly from its peak. Chief Investment Officer Jim Smigiel believes the sell-off is overdone and sees no need for an emergency rate cut by the Fed. The UK stock market has recorded its biggest one-day drop in months, with every stock on the FTSE 100 falling.
However, there is some positive news from the US economy, as the services sector shows growth in July. S&P Global’s survey indicates that service sector activity rose, suggesting solid economic growth. This could calm fears of a recession and potentially reduce the pressure on the Federal Reserve to consider sharp interest rate cuts.
Meanwhile, snack maker Kellanova’s shares are soaring amid reports of a possible takeover bid by Mars. The company’s stock has jumped around 17% in early trading, contrasting with the wider market rout. European stock markets also finished deep in the red, with the Stoxx 600 index down 2.2%.
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