Asia tracks worst US selloff since August crash: Markets wrap
Wall Street posted its worst day since the Aug. 5 rout, as weak US data and falling oil prices raised concerns about the health of the global economy.
Japan led the slump, with the Nikkei 225 down over 3%. Shares also fell in Australia and South Korea, while futures pointed to losses in Hong Kong. US contracts edged lower in early Asian trading after the S&P 500 fell more than 2%, with Nvidia Corp. driving a plunge in tech stocks.
The risk-off mood came as the yen jumped and a closely watched US manufacturing gauge again missed forecasts. A selloff in tech stocks also rekindled worries about undue invesetor frenzy about artificial intelligence.
Wall Street’s “fear gauge” — the VIX — soared. Treasury yields tumbled, with traders keeping their bets on an unusually large half-point Federal Reserve rate cut this year. A dollar gauge rose for a fifth session, its longest winning streak since April, before falling slightly in early trading on Wednesday.
The S&P 500 and the Nasdaq 100 saw their worst starts to a September since 2015 and 2002, respectively. With inflation expectations anchored, attention has shifted to the health of the economy as signs of weakness could speed up policy easing. While rate cuts tend to bode well for equities, that’s not usually the case when the Fed is rushing to prevent a recession.
Traders are anticipating the Fed will reduce rates by more than two full percentage points over the next 12 months — the steepest drop outside of a downturn since the 1980s. The trepidation after the latest
