Stocks fall as fears rise on US economy

The Japanese stock market had its worst day in 37 years yesterday, as rising fears of a US recession caused turmoil in equity markets around the world. The global sell-off had two catalysts: a report showing US hiring lower than expected, swiftly followed by speculation that the Federal Reserve had waited too long to cut interest rates. US bonds rallied and equity losses were felt across the board, but AI-focused stocks like Nvidia and Apple, which had gained for much of the year, were hit especially hard. Apple’s losses were compounded by news over the weekend that Warren Buffett’s Berkshire Hathaway has halved its stake in the company and boosted cash holdings to $277 billion. Japan’s rout was due to exposure to key industries like semiconductors, rising rates, and a strengthening of the yen against the dollar. One key number: 43 per cent, the rise in the Vix index of expected US stock market turbulence since last Monday – more commonly known as Wall Street’s “fear gauge”.