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Japan\u2019s benchmark Nikkei 225 index closed more than 10% higher on Tuesday, a day after it set markets tumbling in Europe and on Wall Street. Other markets in Asia also rebounded, but more moderately, appearing to settle somewhat after the rollercoaster ride that started the week.<\/p>\n
The scary Monday started with a\u00a0plunge abroad reminiscent of 1987<\/a>\u00a0\u2019s crash that swept around the world and pummeled Wall Street with\u00a0more steep losses,<\/a>\u00a0as fears worsened about a\u00a0slowing<\/a>\u00a0U.S.\u00a0economy.<\/a><\/p>\n The Nikkei gained nearly 11% early Tuesday and bounced throughout the day to close up 3,217.04 points at 34,675.46 as investors snapped up bargains after the 12.4% rout of the day before.<\/p>\n On Monday, the S&P 500 dropped 3% for its worst day in nearly two years, closing at 5,186.33. The Dow Jones Industrial Average reeled by 1,033 points, or 2.6%, to 38,703.27, while the Nasdaq composite slid 3.4% to 16,200.08 as Apple, Nvidia and other Big Tech companies that used to be the stars of the stock market continued to wilt.<\/p>\n The drops were the latest in a global sell-off that began last week, and it was the first chance for traders in Tokyo to react to Friday\u2019s report showing U.S.\u00a0employers slowed their hiring<\/a>\u00a0last month by much more than economists expected. That was the latest piece of data on the U.S. economy to come in\u00a0weaker than expected<\/a>, and it\u2019s all raised fear the\u00a0Federal Reserve<\/a>\u00a0has pressed the brakes on the U.S. economy by too much for too long through high\u00a0interest rates<\/a>\u00a0in hopes of\u00a0stifling inflation<\/a>.<\/p>\n A report Monday by the Institute for Supply Management said growth for U.S. services businesses was a touch stronger than expected, led by the arts, entertainment and recreation sectors, along with accommodations and food services.<\/p>\n Professional investors cautioned that some technical factors could be amplifying the neck-snapping losses. South Korea\u2019s Kospi index careened 8.8% lower, and bitcoin dropped below $54,000 on Monday from more than $61,000 on Friday. Even gold, which has a reputation for offering safety during tumultuous times, slipped about 1%.<\/p>\n On Tuesday, nearly all markets in Asia aside from Singapore saw gains. The Kospi jumped 4.3% to 2,546.64. Hong Kong\u2019s Hang Seng index was up 0.5% at 16,775.65 And in Australia, the S&P\/ASX 200 edged 0.3% higher, to 7,677.50.<\/p>\n Taiwan\u2019s Taiex was up 1.2% after plunging 8.4% the day before. The Shanghai Composite index, largely bypassed by Monday\u2019s drama, was up just over 1 point, at 2,861.87.<\/p>\n Monday\u2019s meltdowns reflected fears that damage to the economy from prolonged high interest rates has been so severe that the Federal Reserve will have to cut rates in an emergency meeting, before its next scheduled decision on Sept. 18. The yield on the two-year Treasury, which closely tracks expectations for the Fed, briefly sank below 3.70% during the morning from 3.88% late Friday and from 5% in April. It later recovered and pulled back to 3.89%.<\/p>\n \u201cThe Fed could ride in on a white horse to save the day with a big rate cut, but the case for an inter-meeting cut seems flimsy,\u201d said Brian Jacobsen, chief economist at Annex Wealth Management. \u201cThose are usually reserved for emergencies, like COVID, and an unemployment rate of 4.3% doesn\u2019t really seem like an emergency.\u201d<\/p>\n The\u00a0U.S. economy is still growing<\/a>\u00a0so a recession is far from certain. The U.S. stock market is still up a healthy amount for the year, with double-digit percentage gains for the S&P 500, the Dow and the Nasdaq Composite.<\/p>\n Some of Wall Street\u2019s recent declines may simply be air coming out of a stock market that romped to dozens of all-time highs this year, in part on a\u00a0frenzy around artificial-intelligence<\/a>\u00a0technology. Critics have been saying for a while that the stock market looked expensive after prices rose faster than corporate profits.<\/p>\n Expectations for earnings are still high, with growth for S&P 500 profits this past quarter looking to be the strongest since 2021.<\/p>\n Upcoming U.S. elections<\/a>\u00a0could further scramble things: apart from the potential impact of policies that follow the vote, market gyrations could affect the election itself.<\/p>\n A recession would likely to put Vice President Kamala Harris on the defensive, but slower growth would sap inflation. That would oblige former President Donald Trump to focus on ways to revive the economy instead of focusing on higher prices.<\/p>\n The Bank of Japan\u2019s move last week to\u00a0raise its main interest rate from nearly zero<\/a>\u00a0last week was another factor driving Monday\u2019s plunge in Tokyo. Higher rates can boost the value of the Japanese yen, but oblige traders to scramble out of deals where they had borrowed money for virtually no cost in Japan and invested it elsewhere around the world.<\/p>\n On Tuesday, the dollar was worth 145.33 yen, up from 144.17 yen late Monday.<\/p>\n Surging prices for shares in Big Tech companies, like Apple, Nvidia and others known as the \u201c\u00a0Magnificent Seven<\/a>\u00a0\u201d faltered last month on worries prices had overshot expectations for their future growth. Underwhelming profits from\u00a0Tesla<\/a>\u00a0and\u00a0Alphabet<\/a>\u00a0added to the pessimism.<\/p>\n Apple fell 4.8% Monday after Warren Buffett\u2019s Berkshire Hathaway disclosed that it had\u00a0slashed its ownership stake<\/a>\u00a0in the iPhone maker.<\/p>\n Nvidia<\/a>, the chip company that\u2019s become the poster child of Wall Street\u2019s AI bonanza, fell 6.4%. Analysts cut their profit forecasts for the company after a report from The Information said Nvidia\u2019s new AI chip is delayed. Recent selling has trimmed Nvidia\u2019s gain for the year to nearly 103% from 170% in the middle of June.<\/p>\n Alphabet, fell 4.4% after a U.S. judge ruled Google\u2019s search engine has been\u00a0illegally exploiting its dominance<\/a>\u00a0to quash competition and stifle innovation.<\/p>\n Other worries also are weighing on the market. The\u00a0Israel-Hamas war<\/a>\u00a0and other global\u00a0hotspots<\/a>\u00a0could cause sharp swings for the price of oil.<\/p>\n Early Tuesday, U.S. benchmark crude oil was up $1.18 at $74.12 per barrel and Brent crude, the international standard, advanced $1.00 to $77.30 per barrel.<\/p>\n The euro rose to $1.0956 from $1.0954.<\/p>\n<\/div>\nRecommended Newsletter: <\/strong>CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n