Global Selloff Hammers U.S. Stocks; Media & Tech Deep In The Red As Recession Jitters Rattle Markets

Fears of a U.S. recession cascaded across global markets with the Dow Jones Industrial Average down a whopping 1,200 points premarket, off more than 1,000 in early trading. A selloff in Japan overnight first set off a drubbing in Asia and Europe, now Stateside.

Media and tech shares were pummeled, with red across the board. Warner Bros. Discovery is down nearly 8% with declines from Disney to Netflix, Apple to Amazon to Roku and across broadcasters, exhibitors and social media.

The Nasdaq is down 3.6%, the S&P 500 has tumbled 3% and the DJIA was down around 2.4%.

Pressure on stocks started Friday after the Department. of Labor’s monthly data showed a rise in U.S. unemployment. That led many to think the Federal Reserve may have waited too long to lower interest rates from 20-year highs, risking tipping the U.S. economy into a recession.

The Fed dashed market hopes at its July meeting, leaving rates unchanged, but signaled that rate cut is coming. There’s about 100% certainty among market players that a September cut is coming, but some fear it may be too late. The Fed slammed rates higher to counter inflation but it’s a delicate balance.

The DOL said unemployment rose by 0.2% to 4.3% in July as hiring slowed to 114,000 jobs added during the month – considerably less than anticipated. The information sector took the biggest hits in job losses — including in entertainment and media. Movies and sound recording saw a loss of 3,500 jobs, to 445,400, while publishing industries shed 5,900 positions, to 919,600. Broadcasting and content providers lost 1,600 spots to 338,900.

The Japanese stock market had its worst day since 1987 amid a global market crash called Black Monday. The central bank raised interest rates last week to boost the yen, which could be a drag on corporate profits there. In a negative economic climate Japan could be particularly exposed.

Markets fell as players globally were piling out of stocks and into less riskier investments like bonds, with the benchmark 10-year U.S. Treasury yield on pace to settle at its lowest level in more than a year. (Bond yields and prices move in opposition directions.)

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