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

• 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 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, the 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.”