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Stock market live updates: How US markets are feeling impact of plunging global markets

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Stock market live updates: How US markets are feeling impact of plunging global markets

U.S. stocks are set to open sharply lower after global markets plunged overnight as investors continued to worry about the health of the U.S. economy.

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U.S. stocks are set to open sharply lower after global markets overnight plunged as investors continued to worry about a possible recession in the world’s biggest economy.

Over the weekend, billionaire investment guru Warren Buffett ignited speculation he’s soured on stocks as Berkshire Hathaway reported a $276.9 billion cash stake as of June 30, up from $189 billion, after selling another large portion of its stake in Apple.

That reinforced investors fears on Friday that the economy may be slowing. The Labor Department reported Friday that the U.S. economy added only 114,000 jobs in July and the unemployment rate had jumped to 4.3%,  the highest since October 2021. Both were worse than economists’ average forecasts. Compounding the picture of a flagging job market: Employment gains for May and June were revised down by total 29,000.

Most worrying was the sharp rise in the jobless rate triggering what economists call the Sahm rule. It says that if unemployment, based on a three-month average, rises by at least a half percentage point over the past 12 months, the nation is probably in a recession. The rule has correctly predicted all U.S. recessions since the 1970s.

The weak jobs report coupled with downbeat earnings updates from Amazon and Intel and Thursday’s softer-than-expected U.S. factory activity survey pushed the S&P 500, Nasdaq and Dow lower on Friday, with the Nasdaq officially entering “correction” territory.

In Monday’s pre-market session at 8:43 a.m. ET, S&P 500 futures were down 244.25 points, or 4.54%, at 5,131.75, Dow down 1,277 points, or 3.20%, at 38,602, and Nasdaq down 1,133,50, or 6.11%, at 17,422.75.

Follow along for live USA TODAY updates.

Chicago Federal Reserve Bank President Austan Goolsbee on Monday said while employment data on Friday was weaker than expected, it does not look like a recession. Fed officials must stay on top of changes in the environment to avoid being too restrictive with interest rates, he added, an apparent nod to recent calls for the Fed to cut rates.

“You only want to be that restrictive if you think there’s fear of overheating,” Goolsbee told CNBC. “These data, to me, does not look like overheating.”

His comments came amid a global stock market selloff that accelerated on Monday in the aftermath of a disappointing U.S. employment report on Friday and the Fed’s decision last week to leave interest rates unchanged. Fed officials, however, signaled they could cut rates at their next meeting in September.

− Reuters

Oil prices dropped to a six-month low as investors worry about recession and war in the Middle East.

A recession would lessen demand for goods and services and therefore, oil for manufacturing and transporting.

Meanwhile, oil traders are worried about escalating tensions in the Middle East after Secretary of State Antony Blinken said Sunday an Iranian attack on Israel could happen within 24 to 48 hours. Iran on Monday reportedly issued a notice to pilots and aviation authorities to avoid its airspace.

WTI was down 0.76% at  $72.96 per barrel at 9:16 a.m.ET while Brent fell 0.66% to $76.30 per barrel.

−Medora Lee

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