Fear of US recession rattles global markets as tech shares fall

Global stock markets experienced significant declines as fears of a potential US recession intensified, particularly following disappointing employment data. The US economy added only 114,000 jobs in July, falling short of the expected 175,000, while the unemployment rate rose from 4.1% to 4.3%. This data heightened concerns that the Federal Reserve may need to implement a sharp interest rate cut to stimulate economic activity. The tech sector was notably affected, with the Nasdaq index dropping nearly 3% and major companies like Intel and Amazon reporting poor earnings, leading to substantial stock price declines. Japanese equities faced their worst day since 2020, with the Nikkei 225 index falling 5.8%. European markets also suffered, with technology stocks hitting a six-month low and indices like France’s CAC 40 and Germany’s Dax declining significantly. The overall sentiment in financial markets shifted towards a risk-off approach, with investors seeking safe-haven assets like gold, which reached a record high. Analysts predict a high likelihood of a rate cut by the Fed in September, with some speculating on a possible emergency cut before then. The combination of weak job growth, rising unemployment, and declining manufacturing activity has led to increased pessimism about the US economy, prompting discussions about the implications for global markets and the potential for further economic stimulus measures.