On Monday morning, pre-market trading in the US equity futures markets reflected significant declines following a disappointing jobs report for July, stoking fears about a potential economic downturn. The Dow Jones Industrial Average futures experienced a notable drop of 3%, while the S&P 500 futures fell by 4.4%.
Additionally, futures for the Nasdaq composite index faced a sharp decline of 5.8%. This downturn comes on the heels of data released by the Bureau of Labor Statistics on Friday, which indicated the US economy added only 114,000 jobs in July. This number starkly contrasts with analysts' expectations, with Bloomberg's estimates predicting a growth of approximately 175,000 jobs, highlighting a worrisome trend in job creation amidst concerns of an economic slowdown. In the commodities market, oil prices exhibited a downward trend as well, with front-month global benchmarks showing North Sea Brent crude oil dropping 1.6% to $75.55 per barrel.
Meanwhile, US West Texas Intermediate crude oil saw a slightly larger decline of 2%, settling at $72.05 per barrel. These falling prices raise additional questions about balancing supply and demand in the context of current economic indicators. Looking ahead, the S&P Global services index is scheduled to be released at 9:45 am ET.
Market expectations are for it to show a rise to 56.0 for July, marginally higher than the previous month's figure of 55.3. In addition, the Institute for Supply Management's non-manufacturing purchasing managers' index is anticipated to come in at 51.4 for July, up from June's 48.8. These readings will provide further insight into the health of the services sector and its trajectory in the face of fluctuating economic conditions. Globally, market performance exhibited a similar downturn.
Japan's Nikkei index closed 12% lower, while Hong Kong's Hang Seng index ended the day down 1.5%. Notably, China's Shanghai Composite also finished 1.5% lower, reflecting widespread global market pessimism. In Europe, the FTSE 100 faced losses of 3.1%, and Germany's DAX index experienced a decline of 3.3% during the early afternoon session. In the equities space, shares of Apple (traded under the abbreviation $AAPL) tumbled by 10% in pre-market trading after Berkshire Hathaway, an investment conglomerate headed by Warren Buffett, decided to offload its stake in the technology giant.
Similarly, shares of Nvidia (symbol: $NVDA) sank by 14% following reports suggesting potential delays in their new artificial intelligence chips due to design complications. These revelations are likely to shake investor confidence given the growing interest in AI technologies. Conversely, some companies found themselves in a more favorable position.
Kellanova, traded as $K, saw a remarkable increase in its share price, climbing 22% amid speculation that Mars, Incorporated, is contemplating an acquisition of the company. This potential takeover has created excitement for investors, suggesting optimism in the consumer goods sector. As the financial landscape continues to evolve, investors and analysts alike are advised to monitor upcoming economic indicators closely, as they will significantly impact market sentiment and investment strategies moving forward..