Market Turmoil: Nasdaq Plummets Nearly 4% Amid Recession Fears

U.S. stock index futures fell sharply on Monday, driven by a significant drop in the Nasdaq. Fears of a recession, compounded by poor jobs data and shrinking manufacturing activity, unnerved investors. Tech stocks like Apple and Nvidia took sizeable hits, while Wall Street recalibrated its Federal Reserve rate cut expectations.

Futures linked to U.S. stock indexes saw substantial declines on Monday, with the Nasdaq taking the heaviest hit at nearly 4%. The downturn comes amid heightened fears of the United States heading into a recession, as pessimistic economic indicators ripple through global markets. Investors flocked to safe-haven assets, driving down bond yields and increasing bets that the Federal Reserve will need to enact swift interest rate cuts to stimulate growth.

All major growth stocks that previously drove the indexes to record highs experienced sharp declines in premarket trading. Apple Inc fell 7.3% following news that Berkshire Hathaway had reduced its stake in the company by almost half, signaling Warren Buffett's concern over lofty stock valuations and broader economic conditions. Nvidia shares also dipped 6.8% after delays were reported in the launch of its new artificial intelligence chips due to design flaws.

Upcoming speeches from Federal Reserve officials throughout the week could further influence market sentiment. The CBOE Volatility Index, a key measure of market uncertainty, surged to 35.19, its highest point since May 2022. Meanwhile, crypto-linked stocks also saw significant declines, with Bitcoin hitting its lowest level in five months.

(With inputs from agencies.)